SEOUL, Aug 21 (Reuters) - Creditors of Daewoo Shipbuilding & Marine Engineering Co Ltd are formally seeking bidders for a 50.4 percent stake in the world's No. 3 shipbuilder by next Wednesday, its top shareholder and lead manager said.
Korea Development Bank (KDB) and state-run Korea Asset Management Corp are the offering 96.4 million shares they hold in Daewoo Shipbuilding, according to an invitation notice carried in early Friday edition of the Korea Economic Daily.
As expected, the notice specified that a bidder must meet the legal requirements to invest in the defence industry, a condition that effectively rules out foreign contenders.
The deal is expected to fetch up to $8 billion, more than double its current market valuation, due to competition from local conglomerates seeking a new growth engine and strong earnings prospects for Daewoo.
POSCO , the world's No. 4 steelmaker, is seen as a strong candidate to buy Daewoo and has been seeking partners to bid with. Construction-focused GS Group and energy-to-insurance group Hanwha are also preparing bids.
But some smaller would-be buyers like Doosan Group recently decided to drop out of the race as tight credit market conditions prove too challenging for some bidders.
Daewoo Shipbuilding shares ended down 3.1 percent at 35,900 won on Thursday, which puts the market value of the 50.4 percent stake to be sold at 3.44 trillion won ($3.27 billion).
KDB plans to pick a preferred bidder by early October.
Daewoo competes with bigger rivalsHeavy Industries Co and Samsung Heavy Industries Co , which are the world's top two shipbuilders. ($1=1051.1 Won) (Reporting by Rhee So-eui, editing by Marie-France Han and Lincoln Feast)