POSCO, the largest South Korean steelmaker, said it is postponing its decision to buy two units of the Dongbu Group due to its financial difficulties, despite pressure from the government to keep the facilities in South Korea.
The world's sixth largest steelmaker is currently struggling with high debt amid three years of declining profits. In this regard, POSCO decided for the moment to abandon the decision to acquire production units. The company's CEO Kwon Zhong said the financial burden associated with the acquisition would not benefit the company as a whole. He added that they are trying to focus on their core business and cut unnecessary costs.
KDB (Korea Development Bank), the main lender of the Dongbu Group, offered to sell it two units - the Tangjin Power Plant and the Incheon Steel and Services Facility, worth about KRW 900 billion. Kwon Zhong said that the acquisition of the Incheon plant will not increase profits. Dongbu Steel (Dongbu) has an outstanding debt of about $ 2.3 trillion. out. (1000 KRW = 0.9866 USD)
KDB said it plans to create a separate bidding process for the Tangjin power plant, which is the most attractive asset from Dongbu Group than Incheon. Meanwhile, POSCO itself plans to sell some of its stocks from POSCO's engineering and construction division, POSCO Energia and POSCO Specialty Steel.
POSCO Decides Not to Buy Dongdu Power & Steel Facilities
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Azovpromstal® 28 June 2014 г. 11:04 |
