(KDB)
The decision by the state-run Korea Development Bank (KDB) to provide 2.5 trillion won in large-scale acquisition financing to Doosan Group is being interpreted as part of a broader push to expand productive finance.
According to industry sources on Monday, Doosan Group is expected to sign a stock purchase agreement with SK Group on May 28 to acquire 100 percent of SK siltron Co., the world’s third-largest semiconductor wafer manufacturer.
Doosan Group plans to first acquire the 70.6 percent stake held by SK Group and related parties, and will later finalize the acquisition of the remaining 29.4 percent stake personally held by SK Group Chairman Chey Tae-won through a separate agreement.
SK siltron’s corporate value is estimated at around 5 trillion won.
KDB plans to provide 1 trillion won in acquisition financing and another 1.5 trillion won to resolve loan repayment obligations triggered by the change in shareholders, according to sources.
Woori Bank, Doosan’s main creditor bank, will also participate as a co-arranger for the acquisition financing.
Doosan Group itself has also secured cash reserves.
Last year, the conglomerate raised about 1 trillion won by selling part of its stake in Doosan Robotics Inc.
To ensure stability in financing procurement, Doosan Group reportedly negotiated financial terms with KDB from the early stages of its acquisition review.
KDB also actively engaged in arranging the financing, judging that building a semiconductor value chain at a national level is important.
If the acquisition succeeds, Doosan Group will be able to encompass both front-end and back-end semiconductor processes, sources said.
Doosan Group currently produces copper clad laminate (CCL), a key material for high-performance semiconductors, through its Doosan Corporation Electro-Materials BG.
It also owns Doosan Tesna Inc., the top company in Korea for semiconductor back-end testing.
By acquiring SK siltron, Doosan Group will also gain the capability to manufacture semiconductor wafers, a fundamental material, enabling it to achieve vertical integration spanning wafer production, material supply, and performance testing.
KDB also viewed the acquisition as requiring the role of a state-run bank in revitalizing regional economies.
SK siltron operates facilities across the country, including in Gumi, North Gyeongsang Province; Cheongju, North Chungcheong Province; and Icheon, Gyeonggi Province.
Doosan Group is reportedly considering additional facility investments in the Gumi plant following the acquisition.
This aspect of the deal expanding productive finance into regional areas is another reason KDB decided to provide large-scale support, sources said.
KDB Chairman Park Sang-jin has emphasized the role of policy banks in revitalizing regional economies.
The long-standing relationship between KDB and Doosan Group is also cited as a factor behind the two sides joining hands once again.
Doosan Heavy Industries & Construction Co., now Doosan Enerbility Co., faced a liquidity crisis in 2020 due to a credit crunch caused by the Covid-19 pandemic and the decline of traditional power generation industries.
At the time, state-run lenders including KDB and the Export-Import Bank of Korea injected 3 trillion won in emergency funds to support the company’s restructuring efforts.
The policy banks also pushed for a restructuring of the company’s business portfolio toward eco-friendly and renewable energy-focused future industries.
In 2022, Doosan Group graduated from the creditor-led management program headed by KDB.
For KDB, the latest support also carries symbolic significance in helping a company it once managed as a creditor grow further into a high-tech industrial company, sources said.
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