Hyundai Heavy Industries Group said Friday it closed a deal with the state-run Korea Development Bank to take over Daewoo Shipbuilding & Marine Engineering.
HHI CEO Kwon Oh-gap and KDB Chairman and CEO Lee Dong-gull announced a joint statement, pledging employment security for DSME workers and continued relationships with DSME’s current business partners.
“The decision to welcome DSME to the HHI Group is deeply rooted in our belief that it is a mission given to our group, as the trailblazer and long-standing leader of Korea’s shipbuilding sector, to take the initiative in elevating the industry to new heights,” Kwon said at the signing ceremony.
Under the deal, HHI Holdings will become the largest shareholder with a 28 percent stake, and the KDB will be the second-largest shareholder with an 18 percent stake.
The transaction will be made in the way of HHI setting up a new sub-holding company, in which KDB will invest all of its DSME stake. In return, it will acquire the stake of the new firm.
The KDB will receive redeemable convertible preference shares worth 1.25 trillion won ($1.1 billion) and 6 million shares of common stock worth 850 billion won in return for 2.1 trillion won of investment in kind on DSME.
DSME said it nominated Lee Sung-keun, a current head of shipyards, as a new CEO of the firm, who started his career at DSME in 1979. Former CEO Jung Sung-leep offered to step down last month.
On the same day, around 500 members from the Korean Metal Workers’ Union staged a protest against the tie-up, at DSME’s shipbuilding plants in Okpo, a neighborhood in the city of Geoje in South Gyeongsang Province.
By Shin Ji-hye (firstname.lastname@example.org)