SEOUL, KOREA - Dongbu Group has signed on May 27 a main agreement with KTB Private Equity to sell off its logistics and public transportation unit Dongbu Express. On the same day Dongbu Engineering & Construction said in a regulatory filing that it would dispose of 2,725,440 shares (50.1%) of Dongbu Express as part of a move to improve its financial standing.

 

Meanwhile, KTB Private Equity will acquire the 100-percent stake of Dongbu Express held hitherto by Dongbu E&C and Gaia Dbex the First Company at the cost of 310 billion won. The total acquisition price is 670 billion won including the debt KTB will assume.

 

Dongbu E&C will buy back shares of KTB Private Equity worth 50 billion won from the proceeds of Dongbu Express. The sale of Dongbu Group's logistics unit was the first outcome after the group announced in November last year a self-rescue plan to secure 3-trillion-won cash by 2015 by selling off its assets. Separately, the deals to sell Dongbu Specialty Steel and the Dangjin Harbor owned by Dongbu Steel have been closed.

 

Korea Development Bank, the principal creditor bank of Dongbu Group, held on the 26th a board of directors meeting and approved a proposal to take over the 100-percent stake in Dongbu Specialty Steel and the Dangjin Harbor at the cost of 110 billion won and 150 billion won each by creating a private equity fund.