Cash-strapped Doosan Group may sell its key construction heavy equipment maker unit Doosan Infracore with market insiders’ attention focused on whether the sale will have an impact on the group’s move to unload other assets.

South Korea’s investment banking players are discussing the possibility of Doosan Infracore being put up for sale, industry sources said on June 16. It is said that creditors are leading the sale process. Doosan Infracore has been considered a potential target to be put up for sale although market insiders have thought that the group won’t give up on the construction equipment maker easily.

With Doosan Infracore emerging as potential target company, prospective buyers of Doosan Corporation Mottrol are paying close attention to the situation. Doosan Group is proceeding with the sale of Doosan Corporation Mottrol at a rapid pace as part of its self-rescue measures. Shortlisted bidders picked by the group earlier this month are conducting detailed due diligence on the company.

Potential buyers of Doosan Corporation Mottrol are paying keen attention to the possible sale of Doosan Infracore as the construction equipment maker is one of Doosan Corporation Mottrol’s major clients.

According to Doosan Corporation Mottrol’s business report, it recorded overseas sales of 330.6 billion won ($272.2 million) and domestic sales of 232 billion won in 2019. The portion of its overseas sales in total sales has gradually increased from 42 percent in 2017 to 58 percent in 2019.

This is attributable to the company’s effort to expand the pool of foreign clients to diversify its source of revenue while the domestic market remains a significant revenue source.

Doosan Corporation Mottrol recorded sales of 562.6 billion won last year, of which 82 billion won, or 14 percent, came from internal transactions. The portion is not huge but it shouldn’t be overlooked considering the number can have a meaningful impact on the company’s valuation.

“Regardless of the portion itself, calculating the value of internal transactions is an important factor for an acquirer,” said an industry source. “(Potential buyers) will have to look at all possible options during their due diligence process, including a scenario of Doosan Infracore actually being put up for sale.” (Reporting by Hee-yeon Han)