The price for South Korea’s Daewoo Engineering & Construction Co. (Daewoo E&C) could shoot up and fetch near $2 billion, given the courting from public energy heavyweights Petroliam Nasional Berhad (Petronas) of Malaysia and Saudi Aramco.

According to financial industry sources on Thursday, Petronas eyes the full 50.75 percent stake in Daewoo E&C plus management rights held by Korean state lender Korea Development Bank (KDB).

The Malaysian energy tycoon plans to conduct due diligence in the Korean construction company this month and formulate bid to take part in the auction in October.

An official from Petronas said the company has been preparing the acquisition since early this year and is courting Malay lenders Maybank and CIMB Bank to form a consortium.

Daewoo E&C’s main creditor and stakeholder KDB wants to choose a preferred bidder within the year and complete the sale early next year.

Petronas is Malaysia’s largest state-owned energy developer with annual sales reaching 100 trillion won ($89 billion). It is interested in the Korean builder to diversify its revenue source as its business depends too heavily on oil industry alone.

Daewoo E&C draws interest from other energy majors as the company has a credible reputation in the Middle East and Southeast Asia and is strong in cutting-edge nuclear reactor technology, having been involved in the export of research reactor to Jordan.

Officials from Aramco reportedly have visited Daewoo E&C several times this year.

Abu Dhabi Investment Company (ADIC) which had bid for Daewoo E&C in 2009 is expected to rebid. A Chinese and U.S. builder also have expressed intent.

KDB said banks leading the sale will arrange IR sessions in Korea and overseas from October.

Shares of Daewoo E&C closed Friday at 7,430 won, up 400 won or 5.69 percent from the previous session.

By Yoo Tae-yang

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