Dongbu Group to sell semiconductor business to raise $2.8bn; Dongbu Group aims to cut back debt from 6.3 trillion won to 2.9 trillion won by 2015, and lower the debt-to-equity ratio from 270 percent to 170 percent in the process

November 18, 2013 Leave a comment

Dongbu Group to sell semiconductor business to raise $2.8bn

Hong Jong-sung, Park Yong-beom

2013.11.17 20:05:10

Dongbu Group chairman Kim Jun-ki chose to revive his conglomerate at the expense of relinquishing semiconductor business he started around 20 years ago. Under chairman Kim’s direction, Dongbu Group said Sunday it will “implement intensive restructuring to fulfill three trillion won ($2.8 billion) self-rescue plan and fully improve corporate finance by 2015.” The restructuring plan is summed up to a brinkmanship strategy of “disposing all we can.” The conglomerate has decided to sell solid subsidiaries Dongbu Hitek and Dongbu Metal, bundled up with their management right. Dongbu Metal is the leader in the domestic ferro alloy market and the second-biggest company in the global ferro alloy market. Dongbu Hitek, specialist in analogue semiconductor, posted 253.7 billion won in sales and 5.1 billion won in operating profit in the first half of this year despite reccession.
The decision to dump Dongbu Hitek signified chairman Kim is letting go semiconductor business after putting every effort into defending it. Chairman Kim said he will sell his personal assets of 100 billion won and spend the cash to raise capital for Dongbu Steel.
Dongbu Group also intends to dump Dongbu Steel’s plant in Incheon and port in Dangjin, as the conglomerate decided to sell its stake in thermal power generation subsidiary Dongbu Power Dangjin. To meet the three trillion won target, the conglomerate will also file for IPO of Dongbu Special Steel; raise capital; sell Dongbu Farm Hannong’s land in Ulsan and Gimhae, and; sell stakes in Dongbu Express and Dongbu CNI.
Dongbu Group aims to cut back debt from 6.3 trillion won to 2.9 trillion won by 2015, and lower the debt-to-equity ratio from 270 percent to 170 percent in the process.

Filed under Investing Process, Macro Trends

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