Financial doubt could impact 50% sale of Korean shipbuilder

The sale of a 50 percent stake in South Korea's Daewoo Shipbuilding and Marine Engineering Co. is being hindered by collapsing global markets, the Korea Herald reported Wednesday.

Government entities Korea Development Bank and Korea Asset Management Corp. own a 50.4 percent share of the shipbuilder but recently announced their intent to sell that share. The newspaper reported that four South Korean companies are in the race to buy the shares:

   Shipbuilding giant Hyundai Heavy Industries Co.

   Korean steel and construction powerhouse POSCO.

   GS Group (a spin-off of conglomerate LG).

   Hanwha Group, another diverse conglomerate.

   Daewoo Shipbuilding was once valued at $6.1 billion, but the price may have dropped to $4.3 billion to $5.2 billion as the credit crunch and U.S. bank failures have taken their toll on the world economy. Those factors may affect the confidence of potential buyers, particularly as ship orders have trended down in 2008. Shares in the company have declined in recent weeks.

   The state-run entities putting their share up for sale indicated they would pick a buyer in October and plan to finalize a sale by the end of the year.