The offering of South Korea’s mid-sized Sambu Construction Co. and Keongnam Enterprises by bankruptcy courts drew multiple bidders to raise expectations for their stalled sales, according to the investment banking industry sources.
Seven candidates have submitted letters of intent to bid for Sambu Construction on Thursday. The main auction is scheduled on June 8. Another mid-sized builder Keangnam Enterprises whose final bids are due on June 15 attracted four bidders in the preliminary auction on the same day.
Sambu Construction has been put up for sale several times but its high debt ratio - over 2 trillion won ($1.8 billion) versus its equity capital of 1.79 trillion won as of the end of 2015 - had been a damper. It streamlined by selling off assets like Belle-Essence Seoul Hotel, Sambu office building and Sambu Sporex and cut debt to 319 billion won.
Sambu Construction was founded in 1948 and received the country’s first construction business license. It has been under court receivership since 2015 after a series of failures in project financing businesses. It is strong in public works such as building ports, dams and roads, and owns an apartment brand Sambu Renaissance. Last year, it ranked 53rd among the nation’s builders in the number of contracts.
As of 1:30 p.m. on Friday, shares of Sambu Construction were down 8.9 percent at 17,900 won in Seoul trading.
Keangnam Enterprises also under court reorganization program since 2015 ranked 35th in terms of the number of contracts. It was put up for sale last year but the sale fell through as the preferred bidder failed to prove its funding capability.
By Yoo Tae-yang
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]