"Hasty, Secretive, and Collusive Sale"... Controversy Surrounds Daewoo E&C Rebid

"Where Would Anyone Rebids Because the Price Is High?"

On the 2nd, union members are shouting slogans at the press conference for the launch of the Emergency Countermeasures Committee against the sale of Daewoo Construction held in front of Eulji Twin Tower, Jung-gu, Seoul.

In the re-bidding process for the sale of Daewoo Engineering & Construction, it is reported that the consortiums of Jungheung Construction and DS Networks each submitted new acquisition prices, raising concerns about the sale procedure.

According to financial sources on the 3rd, Jungheung Construction and the DS Networks consortium submitted new price proposals to KDB Investment, the largest shareholder of Daewoo Engineering & Construction, on the afternoon of the 2nd.

In the main bidding that closed on the 25th of last month, Jungheung Construction reportedly offered 2.3 trillion won, while the DS Networks consortium offered 1.8 trillion won.

Due to the large price gap, Jungheung Construction was expected to be selected as the preferred negotiation partner.

However, there were rumors that Jungheung Construction might give up the acquisition, judging that the price difference with the second place was too large.

To prevent the worst-case scenario of a failed acquisition, KDB Investment appears to have decided on a re-bidding. Since giving only Jungheung Construction a chance to adjust the price could be seen as preferential treatment, it is analyzed that the process was designed to allow the DS Networks consortium to participate as well for fairness. The sale target is the 50.75% stake in Daewoo Engineering & Construction held by KDB Investment.

The acquisition prices submitted by Jungheung Construction and the DS Networks consortium on this day were not disclosed, but the industry expects the sale to be finalized in the low 2 trillion won range.

Jungheung Construction is likely to have submitted a lower price than the 2.3 trillion won offered in the main bidding, while the DS Networks consortium probably offered a higher price.

KDB Investment is reportedly planning to select the preferred negotiation partner as early as next week and complete the sale process within the year.

Criticism has also been raised that the sale process has been reversed without principles in this re-bidding.

While it is not uncommon to have a re-bidding when the offered acquisition price is low, it is extremely rare to have a re-bidding when the acquisition price is higher.

The Daewoo Engineering & Construction Labor Union held a press conference on the 2nd, pointing out that "conducting a re-bidding just seven days after the bid is irrational," and asked, "If this unreasonable decision is not a secretive and preferential sale to favor a specific company, then what is it?"

The union demanded, "The Korea Development Bank must immediately stop the secretive, preferential, and collusive sale, form a consultative body with the union, and then proceed with a transparent and fair sale process based on new principles."

If the sale is finalized at a lower acquisition price than that offered by the acquisition candidate in the main bidding, there could be allegations of breach of trust against KDB Investment.

The union stated, "The re-bidding is a clear obstruction of bidding and a breach of trust favoring a specific company," and claimed, "The sale of national assets led by policy financial institutions is being rushed."

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