Wednesday, November 23, 2005

Daewoo Construction Up For Bid

One of the casualties of the 1997 Asian fiscan crisis was the Daewoo Group. A few of its affiliates are still controlled by creditors.

Global construction companies are expected to participate in a bidding to buy Daewoo Engineering & Construction, which has been under the management of Korean creditors since the crisis.

Potential bidders include the worldÂ’s top 10 construction firms, such as Hochtief AG of Germany, Skanska AB of Sweden, Vinci of France, Bechtel of the United States and Bouygues of France.

Among domestic competitors are the Kumho Asiana Group, Doosan Heavy Industries & Construction, Hanjin Heavy Industries & Construction, SK Engineering & Construction, Isu Engineering & Construction, GS Engineering & Construction and Amco of the Hyundai Automotive Group.

Many of the domestic and foreign builders are expected to submit letters of intention (LOI) in several weeks, according to Citi Global Market Securities, designated as the sale broker by creditors.

The sale broker plans to name two preferred bidders in January and conduct due diligence. A single negotiator will likely be selected by March.

A Citi official said a number of companies expressed their commitment to vying for the Daewoo Construction takeover.

Subsidiaries of the now-defunct Daewoo Group have successfully normalized their operations and graduated from debt workout programs led by the Korea Asset Management Corp. and other major creditors.

Daewoo Engineering & Construction is KoreaÂ’s second-largest construction company and one of the top 50 builders in the world, competing with Hyundai Engineering & Construction, the nationÂ’s top and the worldÂ’s 23rd construction firm.

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