Doosan Submits Amendment, Expands Sale Targets to Recover Management

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@

[Asia Economy Reporter Ki-min Lee] Doosan Group, which submitted a self-rescue plan on the condition of a 1 trillion won loan from the Korea Development Bank and the Export-Import Bank of Korea, is drawing attention as to whether it will expand the scope of businesses and affiliates for sale to raise funds.

According to related industries on the 18th, Doosan is considering restructuring some affiliates, business divisions, and the business divisions of Doosan Heavy Industries & Construction. Even if Doosan receives a 1 trillion won loan this year, it falls far short of the approximately 4.2 trillion won in borrowings that must be repaid this year. Even if the Export-Import Bank converts the $500 million (about 600 billion won) foreign currency public bonds of Doosan Heavy Industries & Construction, which mature on the 27th, into loans, the situation remains difficult.

First, Doosan is reportedly in contact with several companies to sell Solus. Solus is an affiliate engaged in battery foil for electric vehicles and OLED business, with Doosan and Park Jung-won, chairman of Doosan Group, and related parties holding 50.48% of common stock and 11.04% of preferred stock. The industry estimates the sale price of the common stock and management rights to be around 600 billion to 800 billion won. Doosan initially negotiated the sale with the private equity fund (PEF) Skylake Investment but switched to a public bidding method as the differences in opinions were not narrowed.

Doosan is also reportedly pushing for the sale of Motrol and the industrial vehicle business divisions. Doosan seems to believe that the Motrol (hydraulic equipment) and industrial vehicle (forklift) business divisions are receiving favorable evaluations in the market as they consistently generate sales and operating profits. The Motrol business division recorded sales of 480.6 billion won and operating profit of 38.9 billion won last year, while the industrial vehicle business division recorded sales of 912.5 billion won and operating profit of 61.6 billion won last year.

In addition, the coal-fired power generation business, which accounts for about 70% of Doosan Heavy Industries & Construction's business, and the WATER business division responsible for desalination plants and water treatment facilities within Doosan Heavy Industries & Construction are also candidates for sale. Furthermore, Neotrans, the operator of the Shinbundang Line, and Doosan Mecatec, a manufacturer of industrial heating boilers and metal tanks, are also mentioned. In fact, except for the gas turbine-related business, which is considered a new industry, all are subject to sale.

Doosan's "belt-tightening" continues. To reduce fixed costs, Doosan Heavy Industries & Construction, which carried out voluntary retirement earlier this year, is considering additional voluntary retirements and furloughs for idle personnel. In addition, executives of all Doosan affiliates have been required to return more than 30% of their salaries since April, and child education expenses and performance bonuses paid to Doosan Heavy Industries & Construction employees have also been deferred. Furthermore, new employee recruitment has been postponed. Doosan Heavy Industries & Construction previously conducted high school graduate recruitment targeting Meister High School students who join after military service. About 60 successful candidates were scheduled to join in October last year but have been waiting for six months.

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