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Doosan’s plan to meet bailout requirements gathers momentum

An exterior view of We've the Zenith apartment complex in Ilsan, Gyeonggi Province. (Doosan E&C)
An exterior view of We've the Zenith apartment complex in Ilsan, Gyeonggi Province. (Doosan E&C)
Debt-saddled Doosan’s efforts to secure cash in response to the policy lenders’ bailout appears to be coming to fruition, as the construction-to-equipment giant is finding new investors to help the conglomerate improve its balance sheet.

In line with ongoing moves, Doosan is looking to embark on talks with Daewoo Development Engineering & Construction, the Korean subsidiary of Chinese real estate developer JL Global, to sell Doosan Engineering & Construction.

The final decision for the preliminary agreement on the deal is expected to come next week, while detailed terms for the contract have yet to materialize.

Doosan E&C operates apartment brand We’ve in the domestic residential housing market. It is wholly owned by Doosan Heavy Industries & Construction.

This comes abreast with Chairman Park Jung-won’s bid to secure at least 1 trillion won ($831 million) cash, as pledged in June in his letter to employees.

Doosan in June agreed to sell off a golf course Club Mow CC for 185 billion won with an investor group led by domestic builder Moamiraedo. Last week, local private equity firm SkyLake Investment signed a nonbinding agreement with Doosan to buy a controlling stake in copper foil maker Doosan Solus.

Other assets in talks for sale include hydraulic components maker Doosan Mottrol and the Doosan Tower property in northeastern Seoul.

Doosan has so far received 3 trillion won in credit from state-led lenders the Korea Development Bank and Export-Import Bank of Korea to normalize the operation of Doosan Heavy. This includes the latest lifeline of 1.2 trillion won to what was once a leading power equipment maker for coal-fired, nuclear and gas energy, in order to help the firm pick up the pieces from the cash shortage due to the impact of the novel coronavirus. Doosan has vowed to come up with 3 trillion won in cash in return for the bailout.

By Son Ji-hyoung (