Published on : Sep 08, 2015
Dongbu Corporation, which is a mid-sized Korean builder recently sent a letter that explains the sales process and qualities desired in order to attract potential Chinese firms, as stated by local reports.
As per the news report, NH Investments & Securities that will manage the company’s sale sent the letter printed in Chinese and English to almost 10 Chinese companies that are interested in expanding business to Japan and Korea.
If the company is successful, Dongbu will be marked as the first construction company in Korea to be bought by a Chinese company.
The company reports further revealed that the letter that has been sent to strategic and financial investors after the sale was announced on August 10. The names of the companies to whom the letter is sent will not be revealed, but the companies were selected either because of interest from their side or attempted to expand business activities in Korea, as stead by Dongbu officials.
Dongbu official further added that they are optimistic about receiving letter of intent from several Chinese firms, attributed to history and proven performance of Dongbu in Korea.
The sale is estimated to be priced at about US$174.4 bn. Presently, Dongbu holds 320 billion won from unsecured claim, of which the company plans to pay 110 bn won this year. This would leave the buyer of Dongbu to be responsible for the rest of the 210 billion won worth unsecured claim.
In the domestic Korean construction market, at least six construction companies, which includes STX Construction, Kukdong E&C, but Dongbu is actively on the lookout of a Chinese buyer.
Industry insiders opine that increased technology and wide market capitalization of China has prompted the Korean company for the unusual move.
If the acquisition is successful, the Korean company expects synergy in housing, estate development and plants