이 기사는 2020년 04월 23일 08:00 thebell 에 표출된 기사입니다.

A key part of the sale of Doosan Group’s material solutions affiliate Doosan Solus is expected to be the expansion of the company’s copper foil and battery foil production facilities in a bid to increase its production capacity.

Doosan Group is planning to sell all of its stake in Doosan Solus, intent to deliver an intensive self-rescue plan after receiving a massive bailout from state-run banks, Korea Development Bank and the Export-Import Bank of Korea, sources familiar with the matter said on Tuesday.

Doosan Solus’ business is composed of battery copper foil business and advanced materials business. The advanced materials business includes Organic Light Emitting Diode (OLED) materials and natural bio materials used in pharmaceuticals, cosmetics and nutraceuticals. Doosan Solus’ core business is the battery copper foil business which manufactures battery copper foils and copper foils.

Doosan Group wants Doosan Solus’ enterprise value of approximately 1.5 trillion won considering the growth potential of its battery foil business. The value estimates from local brokerage firms are similar. Eugene Investment & Securities estimates the enterprise value of Doosan Solus at around 1.4 trillion won and points out that its battery foil business and OLED material business are the key of the increase in its valuation.

The prospect of the battery foil business is rosy thanks to growing demand for secondary battery, but Doosan Solus has lower production capacity compared to its rivals. Doosan Solus recently completed Doosan Energy Solution with an annual production capacity of 10,000 tons in Hungary, readying to expand its production. Doosan Solus’ peers, Iljin Materials and KCFT’s annual production capacity is approximately 30,000 tons more than that of Doosan Solus.

This makes Doosan Solus inevitable to expand its production facilities. The company is likely to spend a large amount of money on capital expenditure to increase its production capacity. Doosan Solus aims to incrementally increase its annual production to meet market demand, to 50,000 tons.

Doosan Solus has not disclosed how much it has invested in its plant for an annual production of 10,000 tons. Local brokerage houses estimate the amount at around 200 billion won. Assuming the company has invested 200 billion won for an annual production capacity of 10,000 tons, it will need 800 billion won to construct a plant for an annual production capacity of 40,000 tons.

Doosan Group is likely to accelerate the sale of Doosan Solus to secure liquidity, which means its planned investment is expected to be carried out after the deal completes. Potential buyers of Doosan Solus may have to set up a financing plan for the plant expansion after the acquisition.

“The expansion plan may change depending on who acquires Doosan Solus, but it is true that a large amount of investment is needed,” said an investment banking industry source. The source added that how a potential buyer will set up the company’s growth plan is also drawing attention. “Investment needs for copper foil and battery foil businesses are high, with STIC Investment recently investing in 600 billion won in Iljin Materials.”

STIC Investment decided to put 600 billion won in Iljin Materials’ Malaysian unit via its Special Situation Fund 2 closed last year.

(By reporter Kim Byung-yoon)