3 November, 2009
UPDATE 2-Three firms vying for $3 bln Daewoo Eng stake-source
* Three foreign firms still in auction - source
* Korean Embassy says Abu Dhabi Investment Co bidding
* Final bids to be received between Nov. 4-11
* MBK Partners quits
(Adds Korean Embassy spokesman, details)
By Cho Mee-young and Amena Bakr
SEOUL/DUBAI, Nov 3 (Reuters) - Three foreign firms, including an Abu Dhabi investment vehicle, are vying for a majority stake in Daewoo Engineering & Construction Co Ltd (047040.KS), a Daewoo source said, in a deal potentially worth $2.6 billion.
United Arab Emirates' (UAE) Abu Dhabi Investment Co, Saudi Arabian investment company S&C International and AC Development of the United States were in the auction, the source told Reuters on Tuesday.
In Abu Dhabi, Kyu Nam Chae, the Korean Embassy's energy and commercial attache said Abu Dhabi Investment Co was in the running.
Kumho Asiana Group, the parent group of the country's No.3 builder, has put the majority stake in Daewoo Engineering up for sale as it has to buy back a stake held by financial investors at far above the market price from December. [ID:nSEO204542]
Investors in the world's largest oil exporting region are increasingly on the look out for bargains in the wake of the global financial crisis. They have been buying foreign companies and bringing their expertise to the region to help diversify their booming economies.
"The Abu Dhabi Investment Co is bidding for Daewoo Engineering & Construction, because they have an interest in construction," said Chae at the Korean Embassy.
Abu Dhabi Investment Co is the former name of a vehicle controlled by the Abu Dhabi Investment Council (ADIC), an investment arm of the Abu Dhabi government (www.adic.ae). It is now called Invest AD.
ADIC executives either declined to comment or were unavailable. However, a source close to Invest AD, said it was not involved in the tender.
Chae said he believed the group bidding was part of ADIC.
"As far as I know the Abu Dhabi Investment Co is part of the Abu Dhabi Investment Council, so I think it's the same thing," Chae said.
Korea Development Bank (KDB) and Nomura, which are handling the sale, are set receive final bids between Nov. 4 and 11, and complete the auction by the middle of this month.
In October, KDB Chief Executive Min Euoo-sung told reporters that Daewoo Engineering would most likely be sold to a foreign company. [ID:nSEO204542]
Construction is an important industry in the Gulf region.
Investments in Abu Dhabi infrastructure, property and manufacturing alone are expected to reach about $1 trillion in the medium term and projects underway in the capital have reached $100 billion, the United Arab Emirates economy minister said on Monday.
Saudi Arabia has said it will pour about $400 billion into infrastructure development over the next five years.
AC Development runs project construction and other engineering services, according to its website (www.acdevelopmentgroup.com).
Private equity firm MBK Partners has dropped out of the bidding. (Additional reporting by Kim Yeon-hee and John Irish; editing by Chris Lewis)
Source: http://www.reuters.com
UPDATE 2-Three firms vying for $3 bln Daewoo Eng stake-source Added: (03.11.2009)
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