Whether InfraCore and Bobcat Will Be Separated Likely to Be Key to Doosan Heavy Industries' Self-Rescue Plan

Doosan Group, Amid Doosan Heavy's Self-Rescue Plan, Separation of Key Subsidiaries InfraCore and Bobcat Emerges as Crucial Issue
Separation Seen as Most Effective Option for Smooth Fundraising
Doosan "Reviewing Various Self-Rescue Plans" Creditors "Will Start Discussions Immediately Upon Receiving Plans"

[Asia Economy Reporter Jo Gang-wook] The key issue in Doosan Group's self-rescue plan for Doosan Heavy Industries & Construction is expected to be whether to separate Doosan Infracore and Doosan Bobcat.

According to financial circles and Doosan Group on the 31st, Doosan Group, which is currently preparing a self-rescue plan, plans to submit it soon to creditors including the Korea Development Bank and the Export-Import Bank of Korea.

A creditor official said, "We will review it once Doosan Group prepares and brings the self-rescue plan," adding, "There has been no concrete discussion yet."

The market is focusing on whether to separate Doosan Infracore and Bobcat as the key card of this self-rescue plan. This is because Doosan Infracore and Bobcat are considered valuable companies within the ownership structure that goes from Doosan Corporation → Doosan Heavy Industries & Construction → Doosan Infracore → Bobcat. It is viewed that cutting off the vertical affiliate structure could be the most effective alternative for smooth fundraising. If Doosan Infracore and Bobcat remain under the financially troubled parent company, it would benefit neither company.

In fact, on the 24th, Korea Ratings registered Doosan Heavy Industries & Construction's unsecured bonds credit rating (BBB) for downgrade review, explaining, "If Doosan Heavy Industries & Construction's financial risk spreads not only to the holding company Doosan but also to subsidiaries Doosan Infracore or Doosan Bobcat, the credit ratings of these affiliates will also deteriorate."

On the 27th, the Doosan Tower building in Dongdaemun-gu, Seoul, is visible as the government decided to inject 1.6 trillion won into Doosan Heavy Industries, which is experiencing financial difficulties, through the Korea Development Bank and the Export-Import Bank of Korea. Photo by Kang Jin-hyung aymsdream@

The market is paying attention to the speculation that Doosan Infracore and Bobcat might separate from Doosan Heavy Industries & Construction by splitting and merging Doosan Heavy Industries & Construction.

The plan is to separate Doosan Heavy Industries & Construction into an operating company and an investment company holding shares of Doosan Infracore and Bobcat, then merge the investment company with Doosan Corporation.

If this happens, only Doosan Construction, a 100% subsidiary, will remain under Doosan Heavy Industries & Construction.

Another method is for Doosan Corporation to acquire the 36.27% stake (75,509,366 shares as of the end of last year) in Doosan Infracore held by Doosan Heavy Industries & Construction.

This plan allows Doosan Heavy Industries & Construction to improve its financial structure, while Doosan Infracore and Bobcat benefit from having Doosan Corporation as their parent company. However, a large-scale paid-in capital increase is required for Doosan Corporation to acquire the shares, and whether shareholder approval can be obtained remains a variable.

A Doosan Group official said, "We are currently reviewing various self-rescue plans including the sale of some affiliates, but nothing has been finalized," adding, "We will prepare a high-intensity self-rescue plan that includes responsibility fulfillment by affiliate shareholders and major shareholders and submit it to the creditors as soon as possible."

This content was produced with the assistance of AI translation services.