Rumors that Doosan Heavy Industries and Construction might soon take over Ansaldo Energia, a leading Italian power engineering company, are flaring up again after media reported on fundraising efforts for the deal.

Ansaldo Energia, owned by Finmeccanica, a state-run Italian defense and aerospace group, was put up for auction last year due to mounting debt. Finmeccanica holds a controlling 55 percent stake in Ansaldo Energia, while U.S. private equity firm First Reserve holds the remaining 45 percent stake.

According to the news report, officials from the state-run Korea Development Bank confirmed that Doosan Heavy asked for a letter of confirmation for financing the deal with the Italian company in the first half of this year.

But the bank declined the proposal due to a regulation that puts a ceiling on loans by a business group’s size.

KDB puts a cap on loans for the top 20 business conglomerates at 4 trillion won ($3.6 billion). The policy made it difficult for KDB to issue an additional loan to Doosan Group as two of its units ― Doosan Infracore and Doosan E&G ― had already borrowed funds from KDB, the news report said.

Instead of raising funds from the state-run bank, Doosan Heavy plans to issue $500 million worth of global depository receipts to raise funds to take over Ansaldo Energia.

A spokesman for Doosan Corp., the holding company of Doosan Group, confirmed the plan this month, but declined to comment on whether the money raised would be used to buy Ansaldo Energia.

Industry watchers appeared positive on the outlook for Doosan’s acquisition so long as public resistance in Italy against the takeover of a state-run company by a foreign investor did not hamper the deal.

“Doosan is the sole and most proactive bidder for Ansaldo for now,” an official form Woori Investment and Securities said.

German industrial giant Siemens and Samsung Techwin, an affiliate of Samsung Electronics, have reportedly dropped their bids due to lack of a synergy effect expected after the merger and high deal cost, respectively.

Doosan Heavy, a builder and supplier for a variety of power generation plants, has sought technology to manufacture gas turbines, one of the core parts of lucrative combined cycle power plants. About five industrial giants, including Siemens and Ansaldo, manufacture and supply gas turbines for power generation.

By Seo Jee-yeon (jyseo@heraldcorp.com)