Daewoo Shipbuilding Rises Most in 3 Months on SK Takeover Reportby
SK Group and Korea Development Bank deny Etoday report
Shipbuilder's shares earlier climbed as much as 28 percent
Daewoo Shipbuilding & Marine Engineering Co. jumped the most in more than three months in Seoul trading after Etoday reported SK Group is in talks to buy the world’s second-biggest shipyard. SK Group and Korea Development Bank, the shipbuilder’s largest shareholder, denied the report.
Shares of Daewoo Shipbuilding climbed 7.7 percent, the largest gain since July 21, to close at 7,030 won. The stock earlier advanced as much as 28 percent. SK Holdings Co., the holding company of SK Group, fell 5.6 percent to 254,000 won, the biggest decline in more than two months.
The South Korean government and Korea Development Bank are in final talks with SK Group to sell Daewoo Shipbuilding early next year, Etoday reported, citing unidentified people in the shipbuilding and financial industries. SK Group isn’t in talks to buy Daewoo Shipbuilding, the conglomerate, which owns chipmaker SK Hynix Inc., said in a statement Tuesday in response to a stock exchange request for comment on the report.
“The sale would be good for Daewoo Shipbuilding given it would finally have an owner,” said Park Moo Hyun, an analyst at Hana Daetoo Securities Co. in Seoul. “SK Group has good cash flow given that many of its subsidiaries are making money.”
Creditors of Daewoo Shipbuilding will provide 4.2 trillion won ($3.7 billion) in loans and equity to ease a cash shortage, after two quarters of losses due to delivery delays and order cancellations, Korea Development Bank, also its main creditor, said Oct. 29. Daewoo Shipbuilding lost a combined 3.65 trillion won in the six-month period.