À̹ÌÁö È®´ë The government¡¯s dilly-dallying in the sale of Daewoo Engineering & Construction Co. (Daewoo E&C) has depreciated its value as its income deteriorates amid unfavorable market conditions.
Daewoo E&C reported a 42.1 percent plunge in its operating profit last year at 364.1 billion won ($298.9 million), according to its regulatory filing. Sales fell 18.4 percent to 8.65 trillion won, the lowest since 2013.
As a result, its shares have plunged to 4,300 won levels compared with 6,000 won in January 2018 when it had tapped Hoban Construction Co. for a stake sale. Daewoo E&C shares closed Monday 4.53 percent lower at 4,110 won.
The devaluation complicates the sale plan of state-run Korea Development Bank (KDB), whose 50.75 percent stake value shriveled to 917.6 billion won in January 2020, compared with 1.09 trillion won a year ago.
The state lender gained the stake in Daewoo E&C through a bailout fund of 3.2 trillion won in 2010 and has since tried to turn around the troubled builder prior to a resale. In 2018, it named Hoban Construction the preferred bidder, but the talks fell through after the company walked out of the deal nine days later.
In April 2019, KDB set up KDB Investment, an affiliate devoted to asset divestitures. A few months later, it handed over its stake in Daewoo E&C to the new company to accelerate the builder¡¯s financial recovery.
KDB Chairman Lee Dong-gull had then announced the bank would shore up Daewoo E&C¡¯s financials and put it back on the market two years later.
But KDB Investment has so far made little headway in its restructuring plans. For instance, the Chief Transformation Officer, a new post tasked with overseeing Daewoo E&C¡¯s revamp efforts, has been left empty for the past six months.
¡°The seat has been hard to fill because we couldn¡¯t find the right person with sufficient experience in the construction industry,¡± KDB Investment said. It added that operations are currently being managed by KDB Investment staffers from consulting firms with experience serving the construction sector.
Another setback for KDB is the grim construction industry outlook due to the government¡¯s toughened measures to cool the heated housing market. Housing makes up 61 percent of Daewoo E&C¡¯s total revenue.
KDB Investment said Daewoo E&C will enhance efforts to win overseas orders.
By Kim Gang-rae and Kim Hyo-jin
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]