SEOUL, Aug 1:
A listed European defence company is among the five firms that have submitted main bids for a 49 percent stake in South Korean defence company LIG Nex1 worth around 440 million dollar, a source with direct knowledge of the matter said Wednesday.
Four South Korean private equity firms including IMM, Actium and STIC also made bids, the source said.
Some bidders that submitted comparatively lower prices were considering increasing their bid, while at least one bidder had submitted conditions subject to LIG Nex1’s possible initial public offering, the source said.
A preferred bidder is set to be chosen either by the end of this week or early next week. Citigroup is managing the deal.
LIG Nex1, which makes anti-submarine, cruise missiles and well as weapons systems, is owned by LIG Corp, a holding company that is part of the LIG Group.
LIG Nex1 posted an operating profit of 30.3 billion won (26.64 million dollar) in 2011, compared to 42 billion won in 2010 according to its most recent regulatory filing.
Local credit ratings agency NICE Information Service maintained LIG Nex1’s corporate rating as AA- in March, citing its comparatively stable profitability and outlook for continued cash generation.
LIG Group, which runs businesses ranging from finance to construction, put up the stake for sale in order to secure more funds, a source previously told Reuters.
Its midsize construction unit LIG Engineering & Construction filed for court receivership last year.
A spokesman for LIG Group was not immediately available for comment. ($1 = 1130.6250 Korean won) (agencies)
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