GS E&C is considering unloading control of some of its subsidiaries.
This follows its 388 billion won ($287 million) operating loss in 2023 — its first annual operating loss in 10 years – due to the 552.4 billion won cost to rebuild an apartment complex in Incheon, where an underground parking garage collapsed after the company’s omission of rebar in multiple pillars.
Recently, the construction firm entered a procedure to sell its stake in GS Elevator.
The elevator maker is GS E&C’s wholly owned subsidiary, which was founded in 2021 and has factories in Asan, South Chungcheong Province, and Vietnam.
Last year, GS Elevator failed once again to turn a profit, posting 34.1 billion won in sales and an operating loss of 16.1 billion won.
“We are in talks with multiple companies including Chinese firms to sell our stake,” a GS E&C official said.
“We have yet to decide whether to sell part of our stake or the entire stake.”
The company is also considering selling its controlling stake in GS Inima 스포츠 Environment.
Since it hired Goldman Sachs as an underwriter last year, GS E&C had initially sought to sell part of its stake in the lucrative Spanish water treatment company, which became the Korean firm’s wholly owned subsidiary in 2012.
The construction firm is said to now be pushing ahead with selling its controlling stake in GS Inima, to deal with the aggravating financial burden following a downgrade of its credit rating.
“GS Inima’s valuation is estimated to be at least 1.6 trillion won, so GS E&C’s reputation will be totally different, depending on the amount of cash that will flow into the company after the sale,” KB Securities analyst Chang Moon-joon said.