The offering of a controlling stake in South Korea’s Hanjin Heavy Industries & Construction Co. drew seven bidders, raising expectations for likelihood of a deal.

According to sources from the investment banking industry on Monday, KDB Investment, a subsidiary of state lender Korea Development Bank, has teamed up with Keistone Partners to vie for the cash-strapped shipbuilder. Six others including APC Private Equity (PE), NH PE-Opus PE consortium and Korea Real Estate Investment & Trust (KOREIT) joined the tender.

Up for sale is an 83.45 percent stake in Hanjin Heavy Industries held by seven local financial firms and three Filipino financial institutions. The shipbuilder has suffered from capital erosion caused by poor performance of its Philippine subsidiary.

The strongest candidate is the KDB Investment-Keistone Partners consortium. KDB Investment eyes synergy effects with Daewoo Engineering & Construction, in which it is the largest shareholder by including Hanjin Heavy’s Yeongdo shipyard to its portfolio.

KOREIT that has an ample experience in the real estate investments has also been considered another leading contender. Industry experts believe the company’s construction unit Dongbu Corp. could join forces with Hanjin Heavy’s construction business.

APC PE in 2018 acquired general trading firm STX Corp. during STX Group’s restructuring led by creditors including KDB. The company recently signed a final contract to purchase Heung-a Shipping by forming a consortium with STX Marine Service.

Shares of Hanjin Heavy fell 15.41 percent to close Tuesday at 7,190 won.

By Yoon Won-sup, Jin Young-tae and Choi Mira

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