The Italian company stands as the first Italian real estate brokerage group operating in the UAE
The plan was a strategic option considered by POSCO to improve synergies from a potential $8 billion bid for Daewoo, said a source close to the situation, noting investor concern that there would be little immediate benefit from buying Daewoo.
‘We have signed a letter of intent with a Ukraine company over a possible investment, but specific decisions have yet to be made,’ POSCO said in a statement.
The source said POSCO was also looking at other regions for a similar investment that could improve synergies from buying Daewoo, the world's No.3 shipbuilder.
POSCO's interest in Daewoo Shipbuilding contrasts with its bigger rivals' strategies as they aggressively snap up mining assets to secure stable raw material supplies.
Japan's Nippon Steel and a unit of JFE Holdings, the world's No.2 and No.3 steelmakers, are jointly bidding for Brazilian iron one asset Namisa, which could be worth up to $10 billion, according to industry sources.
Frustrated in bidding against rivals for costly iron ore assets, POSCO is looking to diversify into non-steel assets and wants these to generate 30 percent of consolidated group revenue by 2018. It sees a Daewoo deal as helping secure future demand and protecting against possible ship plate oversupply.
Daewoo Shipbuilding is up for sale by its top shareholders, with bidders due to submit letters of intent by next Wednesday.
South Korea is offering a 50.4 percent stake in Daewoo, which was taken over by creditors in 2000 after parent Daewoo Group collapsed under a mountain of debt. Analysts expect the deal to fetch up to $8 billion, more than double its current market value.
Some analysts and investors have urged POSCO to focus more on increasing its mining assets to raise its mineral self-sufficiency rates, which are less than 20 percent compared with sector leader ArcelorMittal's 50 percent.
Cash-rich POSCO is looking to team up with the National Pension Service and banks in a bid to squeeze out rival Daewoo Shipbuilding bidders who may be financially stretched amid a tight credit market.
Shares in POSCO closed 0.1 percent lower at 468,500 won, beating a 1 percent drop in the broader market
The Italian company stands as the first Italian real estate brokerage group operating in the UAE
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