S.Korea KDB agrees to Daewoo shipyard sale delay

SEOUL, Dec 28 (Reuters) - The Korea Development Bank (KDB), a top shareholder of Daewoo Shipbuilding (042660.KS), said on Sunday it would grant a one-month delay in sealing the sale of the shipbuilder to the preferred buyer, Hanwha Group.

The announcement came after Hanwha, a chemicals-to-brokerage group which runs explosive maker Hanwha Corp (000880.KS), had proposed delaying payment for the acquisition, estimated at up to $5 billion, due to funding constraints.

State-owned KDB initially had baulked at Hanwha's proposal, raising fears the deal could collapse and dragging shares in Daewoo Shipbuilding lower last week.

Hanwha signed a preliminary deal to buy a 50.4 percent stake in the world's No. 3 shipbuilder last month, under which it was supposed to reach a final agreement by Dec. 29, 2008.

"Taking into account the importance of its successful sale to the economy, Korea Development Bank can suspend its rights as a seller, which could include cancellation of the agreement, by Jan. 30, 2009," KDB said in a statement.

In return, Hanwha is required to do its utmost in selling existing assets to finance the purchase and to cooperate with related parties of the deal.

"If Hanwha make efforts to raise funding on its own and then come to us for help, Korea Development Bank could consider measures to help by buying assets owned by Hanwha Group at acceptable prices and conditions."

On Friday, Hanwha called on KDB to loosen payment conditions as the global financial crisis has left uncertain whether financial investors would put their pledged money in the acquisition. Hanwha had planned to pay for part of the acquisition with its own money and raise the rest from investors.

Due diligence has not started due to opposition from Daewoo's labour union, which has asked for job security, guaranteed wages and other incentives, while the cooling economy undermined sentiment towards the shipbuilding industry. (Reporting by Kim Yeon-hee; Editing by Lincoln Feast)