Jungheung Group "Daewoo Construction Acquisition, Due Diligence to be Completed by October"

"Independent Operation Like Hyundai-Kia"

Daewoo E&C Euljiro Building

Jungheung Group, the preferred bidder for the acquisition of Daewoo E&C, announced on the 5th that the due diligence process for Daewoo E&C is progressing smoothly and is expected to be completed around mid-October. If there are no significant contingencies such as serious contingent liabilities or additional insolvencies, the stock purchase agreement (SPA) with KDB Investment (KDBI) is also expected to be concluded soon.

Jungheung Group is preparing the group's future vision and blueprint centered on independent management after acquiring Daewoo E&C and incorporating it into its affiliates. The strategy is to minimize business overlaps caused by the acquisition of Daewoo E&C and maximize the 'synergy effect' by continuing to leverage the existing strengths of its affiliates.

They also plan to establish a long-term investment plan for Daewoo E&C. Following the selection of Jungheung Group Chairman Jeong Chang-seon as the preferred bidder for Daewoo E&C, he stated at a press conference, "The purpose of the acquisition is to revive Daewoo E&C and make it a global company," and added, "We will guarantee employment for Daewoo E&C employees and strive to improve their working conditions," which reflects the implementation plan.

First, Jungheung Group plans to boldly reduce Daewoo E&C's debt ratio, which currently stands at 284% (based on consolidated financial statements at the end of 2020), to a level similar to Jungheung Group's (105.1%) to secure asset soundness. Jungheung Group is proceeding with the acquisition without financial investors (FIs), relying on its abundant financial resources. They are also in a position to make additional reinvestments if necessary.

A senior official from Jungheung Group reaffirmed the independent management policy of Daewoo E&C, stating, "Jungheung Group has no plans for an initial public offering (IPO) of its affiliates, and all rumors circulating in the market about mergers or brand integration with Daewoo E&C are false." He added, "Just as Hyundai Motor and Kia under Hyundai Motor Group have developed through independent management, we will actively support Daewoo E&C to focus on a great leap forward."

Furthermore, Jungheung Group plans to actively strengthen Daewoo E&C's overseas business. There is also an expectation that Daewoo E&C, with its long-standing overseas business experience and information capabilities, can resolve the long-standing desire for overseas investment.

Until now, although Jungheung recognized the necessity of overseas business, it had not taken action. Overseas business involves many variables, which conflicted with Jungheung's management policy of conducting business based strictly on calculated cash flow and profitability. They even declined proposals to establish joint ventures with well-known local investors or companies overseas.

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