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Hoban Construction sole bidder for Kumho Industrial
By Korea HeraldPublished : April 28, 2015 - 19:27
Hoban Construction, a mid-tier builder, has emerged as the sole bidder for a majority stake in Kumho Industrial, the de facto holding company of Kumho Asiana Group.
“Hoban Construction is the only company which submitted a bid by the deadline,” an official of the state-run Korea Development Bank responsible for the deal said Tuesday.
Detailed conditions of the acquisition deal including the bidding price have not been announced yet, but industry watchers estimate that a 57.48 percent stake in Kumho Industrial may be worth up to 1 trillion won ($934 million).
If Hoban is announced as the preferred bidder, it will become a showdown between the builder and Kumho Asiana Group chairman Park Sam-koo who has the first rights of refusal for majority stake in Kumho Industrial.
The creditors of Kumho Industrial are expected to make the announcement earliest by Wednesday.
Hoban has been eyeing the synergy between both construction firms to grow in the domestic housing market after merger.
However, the deal will also give it control of two airlines ― Asiana Airlines, the nation’s second-largest air carrier and Air Busan, Asiana’s low-budget affiliate. Kumho Industrial holds a 30.1 percent stake in Asiana Airlines, and Asiana holds a 46 percent stake in Air Busan.
Given that Kumho Industrial’s market cap is 791 billion won as of Tuesday, a 57.48 percent stake would amount to 450 billion won. But when the premium on control of Asiana Airlines is added, the cost of acquisition is expected to soar to 1 trillion won.
Park has expressed a strong will to retake the group’s holding company. The chairman had to hand over control of the firm to creditors in 2010 due to snowballing debts after acquiring Daewoo Engineering & Construction.
On Monday, Hoban Construction inked a letter of confirmation with Hana Financial Group for financial support worth 400 billion won in a bid to finance the deal.
The mid-tier builder allegedly possesses cashable assets worth 400 to 500 billion won, according to sources.
By Park Han-na (hnpark@heraldcorp.com)
“Hoban Construction is the only company which submitted a bid by the deadline,” an official of the state-run Korea Development Bank responsible for the deal said Tuesday.
Detailed conditions of the acquisition deal including the bidding price have not been announced yet, but industry watchers estimate that a 57.48 percent stake in Kumho Industrial may be worth up to 1 trillion won ($934 million).
If Hoban is announced as the preferred bidder, it will become a showdown between the builder and Kumho Asiana Group chairman Park Sam-koo who has the first rights of refusal for majority stake in Kumho Industrial.
The creditors of Kumho Industrial are expected to make the announcement earliest by Wednesday.
Hoban has been eyeing the synergy between both construction firms to grow in the domestic housing market after merger.
However, the deal will also give it control of two airlines ― Asiana Airlines, the nation’s second-largest air carrier and Air Busan, Asiana’s low-budget affiliate. Kumho Industrial holds a 30.1 percent stake in Asiana Airlines, and Asiana holds a 46 percent stake in Air Busan.
Given that Kumho Industrial’s market cap is 791 billion won as of Tuesday, a 57.48 percent stake would amount to 450 billion won. But when the premium on control of Asiana Airlines is added, the cost of acquisition is expected to soar to 1 trillion won.
Park has expressed a strong will to retake the group’s holding company. The chairman had to hand over control of the firm to creditors in 2010 due to snowballing debts after acquiring Daewoo Engineering & Construction.
On Monday, Hoban Construction inked a letter of confirmation with Hana Financial Group for financial support worth 400 billion won in a bid to finance the deal.
The mid-tier builder allegedly possesses cashable assets worth 400 to 500 billion won, according to sources.
By Park Han-na (hnpark@heraldcorp.com)
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Articles by Korea Herald
