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Dongbu Corp. retrieves $131 million by disposing assets

Collected: 2017.04.12

Distributed: 2017.04.13

Source: Go Direct

South Korea’s mid-size builder Dongbu Corp. has successfully retrieved 150 billion won ($131 million) in cash from the recent sale of its assets, a move that will help improve the financial soundness of the company that was acquired by domestic mid-size private equity fund (PEF) Keystone Private Equity L.P. (Keystone PE) last year due to liquidity woes.

According to the Financial Supervisory Service on Tuesday, Dongbu has secured 85.6 billion won in funds by selling 4.53 million shares in semiconductor foundry Dongbu HiTek Co. in block trade after the latter’s share price has recently picked up thanks to the booming semiconductor sector.

Dongbu has also retrieved 64 billion won including 50 billion won invested in subordinated bonds of Dongbu Express Co. after the logistics services company was recently sold off to Dongwon Group.

In total, the construction company has earned 149.6 billion won in cash under new owner Keystone PE that took over the ailing builder for 206 billion won last year. Keystone PE acquired Dongbu by partly assuming 82.4 billion won worth of corporate bonds issued by Dongbu. It can retrieve 40 percent of total investment at any time should the five-year debts with a 6.5 percent annual yield are repaid.

Under Keystone PE, Dongbu has also successfully turned around. In 2014 and 2015, the company posted operating losses but last year swung to profits by generating 16 billion won in operating income. Last month, it won a number of orders including a 444.6 billion won worth housing project.

By Chun Gyung-woon

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