Friday, November 22nd, 2013
SEOUL, KOREA - The government will cash out 620 billion won worth of shares by selling off its holdings in Daewoo Shipbuilding & Marine Engineering and Korea Electric Power Co.
According to investment banking sources on November 19, the Financial Services Commission has decided to dispose of a 5-percent stake (9,569,538 shares) of its 17.2-percent shareholding in the shipbuilder through a block deal. The selling price will be 35,550 won, a 4-percent discount to the day's closing price of 37,000 won.
Once the deal goes through as planned, the government will be able to earn about 350 billion won in cash. The transaction will be underwritten by Credit Suisse and Hyundai Securities.
Separately the Korea Deposit Insurance Corp. began another block deal on the 1.36-percent stake (8,710,000 shares) in KEPCO. The selling price is 30,576 won at a 4-percent discount of the day's closing price of 31,850 won. It will be able to get a total of 270 billion won from the deal. Citigroup Global Markets Korea, Deutsche Securities Korea, Woori Investment & Securities, and Shinhan Investment will be the underwriters.
The share price of DSME has jumped 30.5 percent from 28,350 won on November 13 on the back of the news that it would be a major partner to a project to transform an old nuclear submarine dockyard in Vladivostok in Russia's Primorsky Krai into a large shipyard capable of building liquefied natural gas tankers and other ships. The state-run electric utility also saw its share price rise rapidly lately after the government's announcement that it would raise the electricity rates. Its share price increased 6.88 percent on November 18 from 27,250 won.
