Kumho Asiana Group to sell its stake in Daewoo Engineering

SEOUL, June 28 (Yonhap) -- Kumho Asiana Group, South Korea's seventh-largest
conglomerate, said Sunday it will sell its controlling stake in Daewoo
Engineering and Construction, in an apparent effort to avert a worsening
liquidity problem.
Kumho bought a 72.11-percent stake in the nation's leading builder in June 2006
for 6.42 trillion won (US$5 billion), 3.5 trillion won of which was funded by
banks and other financial firms.
At the time, the group offered a put-back option under which it promised the
financing providers it would buy back the builder's shares by December 2009 if
the stock price fell below 32,000 won.
Shares of Daewoo Engineering, however, closed at 12,850 won on the Seoul bourse
Friday. The share price hovered above 30,000 won in late 2007, but has continued
to slide on concerns about a slowdown in the construction sector.
"We have decided to sell our stake in Daewoo Engineering to completely resolve
concerns stemming from the put-back option," Kumho said. "We will determine the
scale of the sale after consulting with our main credit bank and counselors in a
way to minimize possible losses and reduce the burden on prospective purchasers."
kokobj@yna.co.kr
(END)