Creditors of Dongbu Steel Co., a cash-strapped steel manufacturer of South Korea, decided to separately sell off the company’s electric furnace used for hot-rolled steel production at its Dangjin plant in western Korea to expedite the plant sale.
According to the industry and bank sources on Thursday, the Dongbu Steel creditors including the state-run Korea Development Bank (KDB) and a steelmaker based in Iran are currently in talks over potential sell-off of the hot-rolled steel electric furnace at the Dangjin mill that is considered one of bad assets of the ailing steelmaker impeding the sale of the plant.
An unnamed official at one of the creditors expects the separate divesture of the hot-rolled steel electric furnace could accelerate Dongbu Steel’s overall restructuring effort.
After the electric furnace is sold, creditors will likely wait until the latter half of this year to embark on auction for the mill in Dangjin.
Separately, KDB is said to be considering liquidating the facilities and land of Dongbu Steel’s Incheon plant with a slim chance for business normalization if no one volunteers to buy the plant.
By Chun Beom-joo and Chung Seok-woo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]