"Doosan, A Time to View with a Positive Perspective"

[Image source=Yonhap News]

[Asia Economy Reporter Koh Hyung-kwang] Daishin Securities stated on the 5th that "the restructuring work being carried out by the Doosan Group has entered its final stage, resolving the financial risks and uncertainties of Doosan Heavy Industries & Construction and the group," adding that "it is time to view the situation positively."

Yang Ji-hwan, a researcher at Daishin Securities, said, "The Doosan Group announced the disposal of Doosan Solus shares, the sale of Doosan's Motrol business division, the free transfer of the owner's Doosan Fuel Cell shares to Doosan Heavy Industries & Construction, and a large-scale paid-in capital increase by Doosan Heavy Industries & Construction yesterday." He assessed, "In addition to these announcements, the sale of Club Mow CC and Doosan Tower is in the final stages, and if the sale of Doosan Infracore is completed by the end of the year, the Doosan Group's restructuring is expected to be completed."

Researcher Yang explained, "Doosan decided to establish Motrol Co., Ltd. through a physical division of the Motrol BG and to dispose of 100% of Motrol's shares for 453 billion KRW." He added, "Doosan plans to secure about 690 billion KRW through the disposal of Doosan Solus and Motrol shares, and if the sale of Doosan Tower is completed, it is estimated to secure funds of about 1.1 trillion KRW."

He continued, "The secured funds are expected to be used to participate with about 580 billion KRW in Doosan Heavy Industries & Construction's paid-in capital increase, and the remaining funds will be used to repay borrowings. Once the share disposals, capital increase participation, and loan repayments are completed, Doosan's net borrowings are estimated to decrease to about 900 billion KRW," adding, "It is expected that a significant portion of Doosan Heavy Industries & Construction's financial risks will be resolved."

Furthermore, Researcher Yang explained, "Doosan Heavy Industries & Construction secured about 1.4 to 1.5 trillion KRW in cash and 17.77% (574.4 billion KRW) of Fuel Cell shares through the paid-in capital increase, receipt of Doosan Fuel Cell shares, and the sale of Club Mow CC." He added, "If the sale of Doosan Infracore shares is successfully completed, a capital expansion effect of over 3 trillion KRW can be expected."

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