Daesung Industrial to sell non-core assets to cut debt

Daesung Industrial Co., a South Korean company whose portfolio ranges from oil and gas to construction, said Monday it plans to raise 1.5 trillion won ($1.4 billion) by the end of next year by selling property and new shares in order to repay debts.

Daesung Industrial said it will sell two plots of land in Gyeonggi Province and D-Cube City, a shopping complex in western Seoul, to reduce its debt ratio to the lower 200 percent range, Kim Jung-min, a senior official at the company, told reporters.

Daesung Industrial posted 1.45 trillion won in debt as of the end of June.

The company also plans to reduce its capital from 143.1 billion won to 20.4 billion won and issue new shares in February to improve its financial structure.

The move comes after Daesung Industrial posted 567.8 billion won in sales in the first half of this year, while logging an operating loss of 11.1 billion won and a net loss of 103.8 billion won.

In May, Daesung Industrial sold a 60 percent stake in its lucrative affiliate, Daesung Industrial Gases Co., to Goldman Sachs' private equity arm, the Principle Investment Area, to cover losses from its real estate projects.

Kim said that once the company streamlines its construction and real estate businesses, it will focus on petroleum gas and overseas resource development projects to become a global energy provider.

Daesung Industrial's shares tumbled 14.95 percent to close at 3,640 won on the KOSPI on Monday as investors dumped its shares after the restructuring plan announcement. The KOSPI declined 0.49 percent. (Yonhap)