Creditor banks of Hyundai Engineering & Construction Co. have picked BofA-Merrill Lynch and a domestic consortium as co-managers to sell their major stake in South Korea's leading builder, Korea Exchange Bank (KEB) said Wednesday.
KEB, the builder's main creditor, said they have selected the foreign financial firm and a consortium of Woori Investment & Securities Co. and a mergers and acquisitions team under the state-run Korea Development Bank to arrange the sale of a combined 35 percent stake in the builder.
KEB, Korea Finance Corp., Woori Bank and a few other creditors are seeking to complete the deal by early next year after selecting the preferred bidder by the end of this year. The deal is estimated to be between 3 trillion won (US$2.5 billion) and 4 trillion won.
Creditors acquired the stake through a debt-for-equity swap in 2001, when the builder was suffering from a liquidity crunch.
They have been looking for a new owner for the construction firm since 2006 when it ended a creditors-led debt rescheduling program, but the onset of the global financial crisis in late 2008 has hampered their search.
Market watchers said Hyundai Group, the parent group of South Korea's biggest sea bulk carrier Hyundai Merchant Marine Co. and Hyundai Asan Corp.,
is interested in buying the construction firm. The builder's 8.3 percent stake in Hyundai Merchant, the group's de facto holding company, makes it
necessary for Hyundai Group to take firm control of management, they added.
Hyundai Motor Group, South Korea's second-largest conglomerate, which broke away from Hyundai Group, is reportedly mulling bidding for the company.