Doosan Heavy Industries Successfully Sells InfraCore... Major Milestone in Management Normalization Plan

35.4% Stake and 800 Billion KRW Management Rights Sale Expected
Hyundai Heavy Selected as Preferred Negotiation Partner

Doosan Bobcat's Strong Performance Expected
No Cash Cow Sale Slump Anticipated

Doosan Heavy Industries & Construction Gas Turbine

[Asia Economy Reporter Ki-min Lee] As Doosan Heavy Industries & Construction (Doosan Heavy) has virtually completed the sale of Doosan Infracore, the management normalization plan (self-rescue plan) is also entering its final stages. Although the 'cash cow' Doosan Infracore has been let go, business structure improvements are progressing smoothly, and with Doosan Bobcat expected to deliver strong performance next year, Doosan Heavy is not anticipated to face a difficult period.

According to Doosan Heavy and others on the 11th, Doosan Heavy selected the consortium of Hyundai Heavy Industries Holdings and KDB Investment as the preferred bidder for the sale of 35.4% of Doosan Infracore's shares and management rights yesterday. The final sale price is expected to be between 700 billion and 800 billion KRW.

With this, the asset sales and restructuring aimed at normalizing Doosan Heavy's management are also entering their final stages. Prior to the sale of Doosan Infracore, the Doosan Group raised 2.21 trillion KRW over the past nine months by selling assets and affiliates such as the golf course Club Mow CC, Neoplux, Doosan Tower, Doosan Solus, and the Motrol business division. The recent rights offering worth 1.2 trillion KRW also succeeded with a subscription rate of 100.27%.

Industry insiders believe that even if Doosan Heavy sells its valuable subsidiary Doosan Infracore, the possibility of falling into a liquidity crisis is low. This is because orders for eco-friendly businesses such as offshore wind power and gas turbine projects, which are Doosan Heavy's next growth engines, are expected to accelerate within two years. The domestic wind power market is projected to grow to 28.5 billion USD (approximately 31 trillion KRW) by 2030. Among this, turbines, Doosan Heavy's main product, account for about half, valued at 14.3 billion USD (approximately 15.5 trillion KRW). The gas turbines that Doosan Heavy is developing as a new growth engine are also expected to be commercialized through demonstration projects in 2022. Doosan Heavy plans to increase new orders through active bidding activities.

Until Doosan Heavy's performance gets on track, Doosan Bobcat is expected to play a key supporting role. The National Association of Home Builders (NAHB) housing market index, an indicator of U.S. housing transactions and new home construction, plummeted until April 30th when COVID-19 first spread in North America but soared to a record high of 85 in October and 90 last month. The U.S. housing market boom is expected to continue next year. Accordingly, strong performance is anticipated from Doosan Bobcat, which holds the number one market share in the North American compact construction equipment market. Researcher Dong-heon Lee from Daishin Securities stated, "Reflecting benefits from infrastructure investments, sales are expected to increase by 16% and operating profit by 47% compared to this year."

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