Many mid-tier Korean construction companies have been put on the block in a bid to quickly close their debt workout programs.

Kyeangnam Enterprises, going through a debt workout since early last year, said Friday that Samil PwC, the manager of its sale, is accepting letters of intent from potential bidders until May 27. After a month of due diligence, the accounting firm will proceed with the main bidding on June 30. 

The midsized builder is best known among Koreans for its apartment brand Kyeangnam Honorsville. The company applied for court receivership in March last year after suffering losses from depressed local demand and heavy investments in massive overseas construction projects including Keangnam Hanoi Landmark Tower in Vietnam. The company’s total debt is estimated at 212.6 billion won ($187.5 million).

Kyeangnam is also selling its subsidiary Suwan Energy, an electric power and heat generator operator, in a separate open bid. The preliminary bidding is set for June 4, and the main bidding for June 26.

Doosan Engineering and Construction, whose stock trading is suspended until May 11 due to a capital reduction, is seeking a closed-door sale of its heat recovery steam generator division to shore up the company’s financial health. Its deal managers are BDA Partners and Ernst & Young.

General Electric and Morgan Stanley Private Equity have shown interest in a deal with Doosan E&C, local reports said. The builder had received the HRSG division from Doosan Heavy Industries in April 2013. The division, a core business for Doosan E&C, posted 231.1 billion won revenue and 12 billion won operating profit in 2015.

Market watchers estimate the deal will be clinched at between 200-400 billion won, Yonhap reported.

Another builder Dongbu Corp., which started debt workout program in July last year, is looking for a new owner as well.

The company had opened a bid in August last year and selected Pine Tree Investment and Management as the preferred bidder in October. However, the two sides failed to close the deal in December.

Dongbu’s sale managers, Hyundai Securities and Samil PwC, plan to conduct a preliminary due diligence by May 29 and open the main bid on June 10, local reports said.

Potential bidders for Dongbu Corp. this time include Hoban Construction, nonperforming loans manager United Asset Management Corp, private equity funds Pine Tree and Key Stone Private Equity, they said.

Other construction companies up for sale include Sambu Construction, Dongah Construction Industrial, Kukdong Engineering and Construction, Woolim Co., and STX Construction.

According to M&A data provider Dealogic, the deal volume of the M&A market for construction sector shrank to $3.4 billion in 2015 from $5.1 billion in 2014, although the number of deals increased to 61 from 57.

By Kim Yoon-mi (yoonmi@heraldcorp.com)