South Korea’s Woobang Engineering & Construction (E&C) Corp., owned by Samra Midas (SM) Group, has won the priority right to negotiate the deal to take over Keangnam Enterprises, the country’s mid-sized builder under court receivership.

According to sources from the investment banking industry on Wednesday, the Seoul bankruptcy court and sale adviser Samil PricewaterhouseCoopers (PwC) chose Woobang as a preferred bidder to buy Keangnam Enterprises. They plan to sign an official contract within next month with an aim to complete the deal around August or September. The sale price is estimated to be around 100 billion won ($87 million), according to sources.

SM Group is expected to bolster its civil engineering business through the acquisition. The group owning construction units including Woobang Corp., Woobang Construction Co. and Woobang E&C has strength in housing construction but is relatively weak in civil engineering business. Last year, it acquired DongAh Construction Industrial Co., famous for its waterway construction project in Libya, to boost its civil engineering sector.

Through the takeover, SM Group would be able to expand its apartment business as well by owning Keangnam’s apartment brand Keangnam Honors Ville. The group’s own apartment brand Woobang lags behind others in brand recognition especially in Seoul.

Keangnam Enterprises ranked 35th in construction capacity in 2016. It ranked 14th in 2012 by striking 2.06 trillion won ($1.8 billion) worth contracts, but entered court receivership in March 2015 after facing liquidity crisis. It was put up for sale several times but failed to draw buyers.

By Yoo Tae-yang

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]