Potential buyers of Doosan Infracore have reportedly asked for the first round of bidding to be delayed amid concern over an unresolved lawsuit filed against a subsidiary company.

Some shortlisted bidders had considered holding back their binding offers until the picture was clearer, but were told by deal manager Credit Suisse that they would be disadvantaged if they missed the deadline, industry sources said on Wednesday (November 25).

The main focus of concern is a lawsuit filed against Doosan Infracore China Co (DICC), a subsidiary of Doosan Infracore. Doosan Group, which obtained a cash injection of 3 trillion won ($2.7 billion) from state-controlled lenders earlier this year after facing liquidity issues, made it clear that it would take care of all contingent liabilities related to DICC, but that was not enough to reassure bidders due to a lack of concrete plans.

Even after completing due diligence and management presentations, potential buyers have suggested the first round of bidding be postponed, industry sources said. They have been locked in a tug-of-war with the seller as they try to maximize their bargaining power.

A consortium of Hyundai Heavy Industries Holdings (HHI Holdings) and Korea Development Bank Investment and ready-mix concrete company Eugene Corporation have submitted final offers, and one could be chosen as preferred bidder – allowing detailed negotiations to begin. But industry sources said they are inferior to other shortlisted bidders, in terms of antitrust regulatory approvals and fundraising.

Any deal with HHI Holdings would face antitrust scrutiny from the government, as Doosan Infracore and Hyundai Construction Equipment, a subsidiary of HHI Holdings, are the largest and the second largest players in the South Korean construction equipment market.

Eugene Group’s affiliates Eugene Corp and Tongyang, which would most likely acquire Doosan Infracore, both have issues with fundraising. Eugene Corp had nearly 84.2 billion won of cash and cash equivalents at the end of September on a consolidated basis, while Tongyang had 42 billion won of cash and cash equivalents; these are sharply lower than the expected acquisition cost of Doosan Infracore. (Reporting by Ar-rum Rho)