Doosan Holding Company System Accelerated

- Some business units of Doosan are to be spun off or transferred

- Overseas direct investment to create stable revenue sources

As part of the combined effort to switch to a holding company system, Doosan has decided to physically divide or transfer some of its business units.

Doosan Co., Ltd. disclosed on the 29th of this month that it is set to transfer its Magazine Business Unit to Oricom Co., Ltd. while physically dividing the Tower Business Unit Building, Parking Lot Lines and Bio Resources Business Unit.

The Tower Business Unit, which specializes in building lease, is being separated into Doosan Tower Co., Ltd. (provisional), while the Bio Resources Business Unit, which specializes in the fodder business, is being separated into Doosan Fodder Co., Ltd. (provisional), an independent corporation. The Magazine Business Unit, which publishes Vogue, GQ and various other fashion magazines, is being transferred to Oricom Co., Ltd., an ad agency with great business synergy. The proposed physical division and business transfer will be approved by a special resolution by the general shareholders meeting of Doosan Co., Ltd. and Oricom Co., Ltd.

Doosan will move one step closer to satisfying the requirements for its transformation into a holding company, as its indebtedness ratio will improve greatly while its assets will be reduced by 420 billion won and its liabilities by 380 billion won through the current physical division and business transfer.

“The current move is intended to enhance future growth and profitability by reshuffling Doosan’s business structure around its core business lines while accelerating its transformation into a holding company,” said one Doosan executive when asked to explain about the background. He also added, “The business units that are being separated or transferred will strengthen their competitiveness while simultaneously enhancing their managerial efficiency and expertise, maximizing the business and shareholder value by generating higher profits in the long run.”

In addition, Doosan plans to make overseas investments to secure stable revenue sources in the future. The company will invest approximately US$50 million in the Doosan Techno Holding Company (provisional), which will own and control the intellectual property rights of Bobcat, a company that Doosan is going to take over. This M&A is targeted at setting up a holding company for long-term stable growth and enhanced profitability by securing stable royalty income overseas.

Additionally, Doosan has further accelerated its efforts to transform itself into a holding company by eliminating its circular equity investment structure following its announcement of the road map that was drawn up last January in order to improve its corporate governance structure.