Daewoo Engineering and Construction Co. Set to Be Sold Soon

Attempts at selling debt-laden Daewoo Engineering and Construction Co. are gaining speed.

“We opened a bid online at the web site of the government procurement system on March 8,” said Korea Asset Management Corporation (KAMCO), Daewoo’s largest stockholder and creditor, on March 15.

“We will solicit bids and receive the Public Fund Oversight Committee’s approval for them until March 23 before selecting an underwriter,” the KAMCO said. “After a feasibility survey of Daewoo, we will select the final bidder.”

To allow the company to be sold overseas, KAMCO will form a consortium of two underwriters, one local and the other overseas, to manage the open bid.

Asked about the timeframe of the sale, KAMCO answered, “It all depends on how long the survey takes to be completed.” It also said, “It takes longer than expected because Daewoo has large sales and many overseas interests.” Daewoo Engineering and Construction was spun off from Daewoo Corporation on December 27, 2000 when it was still under reorganization. It posted sales of 3.41 trillion won in 2001. It posted 4.23 trillion won in sales last year, up 39 percent from two years ago.

Usually, brokerage or accounting firms which understand M&A work as an underwriter. The underwriter selected the final bidder and developed a sales agreement after a feasibility survey. KAMCO and other creditors formed a joint sales committee in December of last year when Daewoo completed its reorganization.

Bechtel, Parsons Brinckerhoff, and HRH will bid to buy Daewoo for their reconstruction projects in Iraq, a construction industry insider said.

In-Jik Cho cij1999@donga.com