Early Restructuring Graduation Through Asset and Affiliate Sales... InfraCore Preliminary Bidding on 28th
Transforming Business Structure into Eco-Friendly Energy Company Leading with 'Gas Turbines and Hydrogen Fuel Cells'
[Asia Economy Reporter Ki-min Lee] Following the sale of assets and affiliate stocks worth approximately 2.2 trillion KRW within six months, Doosan Group is expected to complete its early exit from restructuring if the sale of Doosan Infracore proceeds smoothly. At the same time, the group is pursuing a business transformation into an eco-friendly energy company, aiming to achieve two goals simultaneously.
According to industry sources on the 28th, Doosan Group and the lead sales agent Credit Suisse (CS) are conducting a preliminary bidding for Doosan Infracore today. The sale target is a 36.07% stake in Doosan Infracore held by Doosan Heavy Industries & Construction, excluding Doosan Bobcat. The market estimates the sale price of Doosan Infracore, including management rights, to be in the low 10 trillion KRW range. According to the industry, Hyundai Heavy Industries Holdings submitted a proposal today for the preliminary bidding to select the preferred negotiation partner for the sale of Doosan Infracore, forming a consortium with financial investor Korea Development Bank Investment (KDBI).
Meanwhile, Doosan Corporation finalized the sale of Doosan Tower to real estate investment firm Maston Investment Management for 800 billion KRW today. Located in the Dongdaemun fashion market area of Seoul, Doosan Tower has a total floor area of 122,630 square meters, spanning from 7 basement levels to 34 above-ground floors. After the sale, Doosan Group plans to continue using Doosan Tower through a sale-and-leaseback arrangement.
Previously, Doosan Heavy Industries & Construction received support amounting to 3.6 trillion KRW from creditors starting at the end of March, and Doosan Group submitted a self-rescue plan the following month, pledging to "improve the financial structure with a resolute attitude from both the group and major shareholders." Subsequently, Chairman Park Jung-won announced to all group employees in June the plan to secure a capital increase of about 1 trillion KRW and liquidity of 3 trillion KRW. Accordingly, Doosan Group, which is implementing a high-intensity self-rescue plan, has raised approximately 2.21 trillion KRW by disposing of assets and affiliate stocks over the past six months to secure liquidity. If the sale of Doosan Infracore succeeds, liquidity exceeding 3 trillion KRW will be secured, and restructuring is expected to be completed early.
Simultaneously with the sale process, Doosan Group is strategizing to transform from a traditional power generation and heavy equipment company into an eco-friendly energy company to secure its future. Doosan Group’s future growth engines include Doosan Heavy Industries & Construction’s 'gas turbines' and Doosan Fuel Cell’s 'hydrogen fuel cell' businesses. Last year, Doosan Heavy Industries & Construction became the fifth company worldwide to successfully develop a gas turbine. Following the Moon Jae-in administration’s policies to phase out coal-fired and nuclear power, gas turbines are expected to become the main domestic power source, with full-scale profits anticipated from 2023 after completing demonstration projects. In particular, the global gas turbine market is expected to grow from 97 trillion KRW in 2018 to 200 trillion KRW by 2035, and Doosan Heavy Industries & Construction is working closely with domestic power companies to build a gas turbine industry ecosystem.
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