South Korea’s Hanjin Heavy Industries & Construction Co.’s three power and energy subsidiaries put up for sale as part of the company’s self-rescuing plan have drawn seven potential bidders in a heated bidding battle.

According to the investment banking industry Thursday, Hanjin Heavy Industries and its deal arranging manager Mirae Asset Daewoo Co. received letters of intent from seven bidders in a preliminary auction for the sale of its three units - Daeryun E&S Co., Daeryun Power Co. and Byeollae Energy Co.

The seven bidders are IMM Investment Corp., Keystone Private Equity Co., KDB Infrastructure Investments Asset Management Co., EQ Partners Co., Meritz Securities Co. PE, Hana Financial Investment Co. PE and strategic investor Mirae N Co.

The sale organizer will shortlist preferred bidders by Wednesday next week and conduct due diligence for six weeks until September 23. The deal is expected to be completed by late October.

Taking account of Korea Southern Power Co. that has the right of the first refusal for the buyout of Daeryun Power, the potential candidates will rise to eight in total.

An industry source familiar with the matter said that as Daeryun E&S has a steady cash flow and Daeryun Power and Byeollae Energy have built a solid footing in the country’s power market, they have successfully attracted many private equity firms to the bid.

Daeryun E&S retails and distributes liquefied natural gas (LPG) and natural gas to 850,000 households across Seoul and Gyeonggi Province. It is the fifth-largest gas distributor in Korea. Daeryun Power and Byeollae Energy are electric energy generators whose combined capacity of power generation ranks third in the country following Korea District Heating Corp. and GS Power Co.

By Chun Gyung-woon and Song Gwang-sup

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