South Korea will privatize state-invested firms including Daewoo Shipbuilding and Marine Engineering , its finance minister said.“State-owned firms that compete in the private sector, such as Daewoo, will be privatized immediately,” finance minister Kang Man-soo said in a parliamentary session, responding to a lawmaker's question.
State-run Korea Development Bank, which is set to be privatized, built up stakes in companies such as Daewoo Shipbuilding, Hyundai Engineering & Construction Co and chip maker Hynix in the wake of 1997-98 Asian financial crisis and subsequent liquidity problems.
Shares in Daewoo Shipbuilding, which will be put up for sale by its top shareholders this year, rose by as much as 5%, as the minister's comment cleared investor concerns over a further delay in the bidding process of an estimated $4 billion deal. A stake of just over 50% will go up for sale.
Slow progress in the bidding process due to union protests and delays in selecting a lead manager, which coincided with a retreat in global stocks and a decision to exclude foreign bidders, has benefited potential buyers of Daewoo by reducing competition and the value of the deal by $2 billion from a year ago. (Reuters)