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KDB chief calls EU ‘selfish’ for disapproval of HHI-DSME deal

Korea Development Bank (KDB) Chairman Lee Dong-gull criticized the European Union, Thursday, over its disapproval of Hyundai Heavy Industries’ (HHI) proposed acquisition of Daewoo Shipbuilding & Marine Engineering (DSME), calling the EU decision “extremely selfish and only prioritizing the interests of its member countries.”

He said the state-run KDB, the main creditor of DSME, will look for various alternatives, including privatization, to normalize the financially troubled shipbuilder, saying “We’re open from Plan B to Plan D.”

However, he brushed aside the possibility of injecting fresh capital into the company, saying it would give a bad impression to other countries if debt-ridden enterprises in Korea are seen as relying on state support for survival.

He noted such an impression can result in more disapprovals of mergers and acquisitions between other Korean enterprises requiring consent from other nations for anti-monopoly purposes.

“I find the EU’s decision concerning the planned HHI-DSME merger regretful,” Lee said during an online press conference, pointing out that other involved parties including China and Singapore gave their approval for the plan.

After postponing its decision multiple times, the European Commission on Jan. 13 concluded it is against the mega deal because it would result in reduced competition worldwide for construction of large liquefied natural gas (LNG) carriers.

The long-awaited decision discouraged HHI’s acquisition deal announced in 2019. The nation’s largest shipbuilder accordingly is geared toward filing a lawsuit against the European Commission.

The KDB chairman said although it is up to HHI whether to take legal action, he finds a lawsuit “necessary” because it is critical to make sure that “the Republic of Korea is not easily pushed around by the EU without convincing reasons in terms of their business projects.”

Concerning the normalization of DSME, Lee said its privatization is necessary for the prosperity of the nation’s shipbuilding industry but any further details should be confirmed after “faithfully going through management consulting and other relevant measures.”

Regarding the planned acquisition of SsangYong Motor by the much-smaller Edison Motors, Lee said the state-run lender will make a decision on the latter’s soon-to-be-submitted rehabilitation plan.

KDB is the main creditor of debt-ridden SsangYong Motor, which signed an acquisition deal with Edison Motors, Jan. 10, under the bankruptcy court’s approval.

The takeover deal will be finalized if Edison Motors pays out the remaining acquisition fee of 274.3 billion won ($229.3 billion) and gains approval from more than two-thirds of SsangYong creditors.

Whether Edison Motor can finance the money successfully still remains in question.

Other topics brought up by Lee included KDB’s 2022 plan on enhancing financial support for companies’ carbon-neutrality policies.
Source: The Korea Times

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