Eland Group, a South Korean operator of outlet malls, has been picked as the preferred bidder for the purchase of local builder Ssangyong Engineering & Construction Co., the state-run debt clearer said Thursday.
Eland will likely be acquiring a 50.07 percent stake from existing creditors worth 90 billion won ($79.5 million), and taking over new stocks worth 150 billion won through a rights offering, according to the Public Fund Oversight Committee, which handles state assets.
The Korean retail operator will carry out a due diligence before it signs an official agreement to wrap up the takeover deal at the end of this month with the Korea Asset Management Corp. (KAMCO), which owns a 38.8 percent stake in the builder.
Ssangyong E&C, a former construction arm of Ssangyong Group, was released from a creditor-led debt workout program in Oct. 2004, nearly six years after the program started. Its creditors, including KAMCO, have sought to sell the builder since 2005, but it hit snags largely due to worsening economic conditions.
Meanwhile, some market watchers have criticized KAMCO for hurrying with the sale by putting it on the block for a giveaway price amid a faltering property market.