KDB chief 'not worried' about sale of Daewoo Shipbuilding

(ATTN: ADDS details in para 4, stock reactions in final two paras)
SEOUL, Oct. 13 (Yonhap) -- The chief executive officer of the state-run Korea
Development Bank said Monday he isn't concerned about the prospects for the sale
of Daewoo Shipbuilding & Marine Engineering Co. as companies were set to submit
their final bids to buy a controlling stake in the world's No. 3 shipyard.
Prospects for the sale of Daewoo Shipbuilding were dimming as the shipbuilder's
stock price has more than halved since August, when prospective bidders were
invited to send their preliminary bids, amid the global financial crisis and
following economic slowdown, some analysts say.
"I'm not seriously worried about (that issue), because a price is calculated on
average (stock) prices quoted for at least three months," KDB Chief Executive Min
Euoo-sung said.
For weeks, officials at KDB have indicated the tender for Daewoo Shipbuilding
would fail if a purchase price is too low.
About three months ago, analysts had expected the controlling stake in Daewoo
Shipbuilding could fetch some US$7 billion, but they expect a price of as low as
$4 billion today.
Hyundai Heavy Industries Co., the world's largest shipbuilder, a consortium of
POSCO Co., the world's No. 4 steelmaker, GS Group, an energy and retail
conglomerate, and Hanwha Group, an insurance and chemicals conglomerates, were
widely expected to send their final bids to purchase the 50.4 percent stake in
Daewoo Shipbuilding later in the day.
KDB is the biggest shareholder of Daewoo Shipbuilding with a 31 percent stake and
is managing the sale.
The transaction, if successful, would be one of the biggest asset sales by South
Korea's state-run financial institutions, which took over many indebted private
companies in the wake of the 1997-98 Asian financial crisis.
A preferred bidder is likely to be chosen as early as Oct. 25, according to KDB.
Foreign investors were banned on security grounds from bidding for Daewoo
Shipbuilding, which makes submarines for the South Korean Navy.
Shares of Daewoo Shipbuilding rose 6.2 percent to 18,950 won at one point in
morning trading in Seoul. POSCO and GS Holdings, the holding company of GS Group,
gained 3.21 percent and 6.39 percent to 369,500 won and 24,150 won each.
However, shares of Hyundai Heavy and Hanwha Chemicals fell 1 percent and 1.1
percent to 195,000 won and 37,150 won each.