KDB on Posco: shall we stay or shall we go?

Faced with a falling stock market and contracting ADR premium, the Korea Development Bank is becoming increasingly uncertain whether it wants to sell its stake in the steel giant next week.

As they try to come to terms with the unpalatable reality of offloading the bank's 6.84% stake far below a $20 target price, KDB officials are said to have been vacillating between one potential sale option and another all week.

Local specialists say that the bank has three main options comprising selling the stake to Nippon Steel with which it has a cross-shareholding agreement selling the stake back to Posco continuing with the ADR offering or potentially a combination of the three. Merrill Lynch and Salomon Smith Barney are joint lead managers of the 23.1 million ADR offering, which would now raise $436 million for the group based on Posco's current trading...

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