Final Verdict on Dosan Infra Core China Trading Amount Lawsuit After 5 Years on the 14th

[Asia Economy Reporter Minji Lee] The Supreme Court will hold the final appeal hearing on the lawsuit involving Doosan Infracore China (DICC), the Chinese subsidiary that has had a decisive impact on the sale of Doosan Infracore, on the 14th.

According to the investment banking (IB) industry on the 10th, the Supreme Court's plenary session will hold the verdict hearing for the appeal case regarding the payment of the DICC stock purchase price on the 14th.

This lawsuit was filed in November 2015 by financial investors (FIs) including Mirae Asset Global Investments, Hana Financial Investment, and IMM Private Equity. In 2011, Doosan Infracore sold a 20% stake in DICC to the FIs on the condition of an initial public offering (IPO) and other factors. They also agreed on a tag-along right allowing the FIs to sell their combined shares with the major shareholder to a third party if the IPO did not proceed within three years. However, as both the IPO and public share sale were canceled, the dispute escalated into litigation.

If Doosan Infracore loses the appeal, it will have to repurchase the 20% stake from the FIs, potentially creating a contingent liability of up to about 1 trillion KRW. The court ruled in favor of Doosan Infracore in the first trial and in favor of the FIs in the second trial.

The sale price of Doosan Infracore is expected to be in the mid-800 billion KRW range. In this case, there may be no cash inflow to the group at all, which could hinder the implementation of the group's financial structure improvement plan. Even if Doosan Infracore wins, the FIs are reportedly planning to exercise their tag-along rights.

Some suggest that the outcome of this appeal could affect the sale contract, as the Hyundai Heavy Industries and Korea Development Bank Investment (KDBI) consortium has been selected as the preferred bidder for Doosan Infracore. Meanwhile, Doosan and the Hyundai Heavy Industries-KDBI consortium plan to sign the stock purchase agreement (SPA) by the end of this month at the latest and complete the transaction within four months.

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