Dongbu Special Steel sale could be concluded in November
South Korea’s Hyundai Steel expects the bidding process for the sale of Dongbu Special Steel to be concluded as early as the start of November.
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“If the schedule goes on well, we are going to have the result probably in early November,” a spokesman for Hyundai Steel said in an emailed statement to Steel First on Tuesday September 30.
He confirmed that Hyundai Steel, South Korea’s second-largest steelmaker, submitted a bid for the acquisition of the speciality steelmaking unit of the Dongbu Group on September 25.
“SeAH [Group] and Dongil Industries submitted [bids] too,” he said.
Hyundai Steel is interested to buy Dongbu Special Steel, he continued, but at a “reasonable price”.
One of the largest industrial conglomerates in South Korea, the Dongbu Group has been putting some of its assets – including Dongbu Special Steel and part of Dongbu Steel – for sale as part of a restructuring plan launched late last year and intended to avoid a liquidity crisis.
Based in Pohang, Dongbu Special Steel was spun off from Dongbu Steel in 2011.
It can produce 300,000 tpy of special steel products such as cold heading quality (CHQ) wire, cold-drawn bars and stainless steel bars, which are used by the automotive, construction and electronics industries, among others.
The interest from Hyundai Steel comes as it has been looking to supply auto steel products to carmakers Hyundai Motor and Kia Motors, affiliates of its parent company Hyundai Motor Group.
For the SeAH Group, which is already South Korea’s largest special steel producer, buying Dongbu Special Steel would make it consolidate its position in the market before Hyundai Steel debuts in special steel early in 2016 with the 1-million-tpy speciality steelmaking plant it is building in Dangjin.
Dongil Industries, the smallest of the three Korean contenders, manufactures ferro-alloys, cold-drawn bars and CHQ wires, among other products.
It has yet to reply to Steel First’s queries on its bid.