Doosan obtains control of HANJUNG

Doosan Corp. has secured managerial control of Korea Heavy Industries and Construction Co., or HANJUNG, for about 300 billion won.

The Ministry of Commerce, Industry and Energy (MOCIE) and Korea Development Bank (KDB) said Tuesday that a consortium consisting of Doosan Corp. and Doosan Construction Co. was selected as the successful bidder for a 36-percent stake in HANJUNG. The consortium offered 305.7 billion won or 8,190 won per share. With the successful bidding, Doosan became a new governing shareholder of HANJUNG, a state monopoly in the nation's power-generation equipment sector. The ministry said it would sign a contract to hand over the shares by Dec. 19.

KDB, Korea Electric Power Corp. (KEPCO) and Korea Exchange Bank (KEB) established HANJUNG in November 1980 through joint investments. After taking over the 36-percent stake, Doosan will also be awarded a preferential right to acquire a 15.7-percent stake held by KEB, thereby giving it a chance to obtain a stake of up to 51 percent in the firm.

Currently its employees hold 24 percent of HANJUNG¡¯s shares and 14 percent are listed on the stock exchange. Recently, the company formed a strategic alliance with Westinghouse of the United States by selling convertible bonds worth about $25 million (equivalent to a 6-percent stake).

Doosan Corp. has carried out restructuring by integrating nine business divisions since changing its trade name from OB Beer to the current one in September 1998. It recorded net profits of 83.9 billion won in the first half of this year. As of the end of June, Doosan had assets of 2.3 trillion won, capital of 1.7 trillion won and a debt ratio of 214.7 percent.