Hanjin Heavy slumps after takeover deal

SEOUL-- Shares in Hanjin Heavy Industries & Construction Co. slumped Friday after its creditors signed a deal to sell the financially troubled shipbuilder.

Hanjin Heavy closed at 7,650 won(US$6.85), down 5.32 percent from the previous session as foreign investors dumped its shares.

Creditors of Hanjin Heavy, led by the state-run Korea Development Bank (KDB), signed a deal with a consortium led by local builder Dongbu Corp. to sell it a 66.85 percent stake in the company Thursday.

The consortium plans to complete the acquisition of the company by August after receiving an approval from the Fair Trade Commission (FTC), South Korea's antitrust watchdog and Defense Acquisition Program Administration, the country's arms procurement agency.

Hanjin Heavy has been running two business divisions--shipbuilding and construction -- fully dedicated to building battleships.

On Dec. 22, the consortium was named the preferred bidder for the stake up for sale.

The decision faced stiff opposition from the Busan government and civic groups in Busan, 453 kilometers southeast of Seoul, where the company's shipyard is located, due to concerns that the construction company may turn the shipyard into an apartment complex.

In response to the concerns, the consortium said it will keep running the shipyard.

Source: Yonhap News Agency

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