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KG Group to acquire Dongbu Steel - KDB

Steel News - Published on Fri, 05 Apr 2019

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Korea Times reported that South Korean chemicals conglomerate KG Group is close to purchasing Dongbu Steel, Korea's No 5 steelmaker. The Korea Development Bank (, Dongbu Steel's largest shareholder, said it had selected a consortium comprised of KG Group and Cactus Private Equity as the preferred bidder for the steelmaker. Nearly 85% of Dongbu Steel shares are held by creditors, with KDB having a 39.17% stake, NongHyup Bank 14.9%, Korea Export-Import Bank 13.58% and several other lenders having over 8%.

The deal is valued at around KWR 500 billion (USD 440.84 million) and management of the steelmaker is expected to be transferred through a rights issuance. By issuing approximately 27.5 million new shares to the buyer, the stake held by the creditors will be pushed below 50%.

Dongbu Steel has been up for sale for the past five years, with creditors attempting a split sale, package deal and several other methods to exit from the steelmaker. It went through a corporate workout program in 2015. The company has been suffering financial difficulties for years. Last year, the firm logged KWR 65.61 billion in operating losses, up from KWR 11.77 billion a year earlier. The firm is capable of producing 4.8 million tons of steel a year, with annual sales hovering over KWR 2.5 trillion in 2017 and 2018.

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Posted By : Rabi Wangkhem on Fri, 05 Apr 2019
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