South Korea’s Doosan Group is speeding up the sale of its hydraulic component manufacturer, Doosan Corporation Mottrol, as part of ongoing restructuring efforts.

Doosan Group hired Credit Suisse to lead the sale of Doosan Corporation Mottrol, sources said on May 26. The seller has been in talks with potential buyers, including some financial and foreign strategic investors, since early this month. It will receive non-binding offers for the company this week.

As the sale process is being moved forward faster than expected, speculations are rising that the seller could have a specific buyer in mind. But Doosan Group reportedly said it was pursuing a quick completion of the transaction because it was in urgent need of liquidity.

Whether the seller and potential buyers can agree on the company’s valuation appears to be the key. Doosan Group is said to be seeking 400 billion won ($323 million) to 500 billion won for Doosan Corporation Mottrol. But prospective buyers are questioning whether the company is worth 10 times the earnings before interest, tax, depreciation and amortization (EBITDA). The company recorded revenue of 562.7 billion won, operating income of 38.9 billion won and net income of 30.5 billion won for the year ended December 31, 2019.

Doosan Corporation Mottrol’s defense business could also be an obstacle for the sale because it should be excluded when the company is sold to foreign investors. With this possibility in mind, the seller is reportedly searching for potential buyers to sell the defense business separately.

That was the case for the Kumho Tire deal in 2018. A group of creditors led by Korea Development Bank sold the company to Chinese Doublestar, while its defense business was sold separately to local tire manufacturer HUNG-A.

Doosan Corporation Mottrol manufactures a wide range of hydraulic components such as travel and swing devices, hydraulic pumps and main control valves. It has a customer base in domestic and international markets across China, India, North America and Europe.  (Reporting by Hee-yeon Han)