Daewoo Engineering & Construction surged on Friday morning on a media report that Malaysia’s state-owned energy group is interested in buying a controlling stake in the South Korean builder.
The company’s shares jumped 7.8 per cent to Won7,580 while the broader market was little changed, after a local daily, Maeil Business Newspaper, reported that Petronas is considering acquiring the 50.75 percent stake in Daewoo controlled by state-run Korea Development Bank (KDB).
A KDB spokesman declined to confirm the report, saying the policy lender has not received any official letter of interest from Petronas. Officials at Daewoo E&C were not immediately available for comment.
KDB began the sale process for Daewoo E&C at the end of July, naming BoA Merrill Lynch and Mirae Asset Daewoo Securities as lead advisors for the sale. An official notice to kickstart the sale will be issued at the end of this month.
Daewoo E&C is South Korea’s third-largest builder with annual sales of Won11tn ($9.8bn). The company reported a net profit of Won322.6bn in the first six months of this year, compared with Won46.3bn a year earlier. It is expected to report record earnings this year after its potential losses from overseas projects were fully reflected onto its balance sheet last year.