KDB's Kang says unloading bank's DSME stake is a top priority

Finance

Published: 14 Sep. 2022, 18:43 Updated: 14 Sep. 2022, 19:12

KDB's Kang says unloading bank's DSME stake is a top priority

Korea Development Bank Chairman Kang Seog-hoon speaks at a press conference held in western Seoul on Wednesday. [YONHAP]

The Korea Development Bank (KDB) Chairman said the state-run institution will speed up the sale of the troubled Daewoo Shipbuilding & Marine Engineering (DSME).

Minimizing the holding period of a company and selling it when possible is a principle of the KDB, said Chairman Kang Seog-hoon at a press conference held in western Seoul on Wednesday to celebrate his 100th day in the job.

KDB owns 55.7 percent of the DSME.

Kang said the company requires a lot of research and development and new investment, but they aren't possible when KDB is the largest shareholder.

Finding a new owner that can raise management efficiency is "the way to save DSME," Kang said.

He added that separate sales of individual DSME units, like its defense division, is "impossible."

DSME's corporate value stood at 6.7 trillion won ($4.8 billion) when the bank pushed for its sale in 2008, but its value shrunk to 1.6 trillion won in 2019.

The European Commission blocked the planned merger of DSME with Hyundai Heavy Industries in January.

Kang projected the fate of the Korean Air Lines-Asiana Airlines merger will be settled this year.

Five antitrust authorities must still sign off on the transaction.

KDB is providing 800 billion won of funding to help Korean Air Lines acquire Asiana Airlines.

Kang highlighted the importance of investing in promising industries to foster growth, noting the bank plans to create a 30 trillion won fund to support the semiconductor industry.

"The biggest problem the Korean economy faces is very low growth," Kang said.

The bank will provide 10 trillion won of funding to fabless semiconductor manufacturers, 10 trillion won to material manufacturers and another 10 trillion won to semiconductor makers.

Acquiring corporate bonds and shares and offering financial support are some of the ways funding will be provided.

Korea Development Bank employees protest the bank's plan to relocate its headquarters to Busan. [YONHAP]

Kang said relocating the bank's headquarters to Busan from western Seoul is "a decision made by the government."

"Relocation to Busan was a pledge introduced in the presidential campaign in January" by President Yoon Suk-yeol, Kang said. "I believe properly carrying out the government project is our responsibility."

Relocation has been strongly disapproved of by the KDB labor union, which argues that there will be a potential reduction of policy support and an outflow of human resources following the relocation.

Busan, Ulsan and South Gyeongsang have been somewhat left behind in the fourth industrial revolution era compared to the metropolitan areas, Kang said. Developing these regions "is necessary for more sustainable economic growth."

BY JIN MIN-JI [jin.minji@joongang.co.kr]