A group of Korea-based private equity funds has failed to roll over the maturing loans they took out to acquire a stake in the Chinese unit of construction equipment maker Doosan Infracore, market sources said Wednesday.

In 2011, private equity funds run by firms such as Mirae Asset, IMM and Hana Financial Investment borrowed around 130 billion won ($112.9 million) from local banks to finance their purchase of a 20 percent stake in Doosan Infracore China.


According to the sources, they failed to roll over the debts which were due to mature on Wednesday.

The lenders, which include state-run Korea Development Bank, will now be given the right to dispose of the 20 percent stake, but they have decided to postpone a decision until they see the results of an ongoing suit between the private equity funds and Doosan Infracore headquarters. The investors filed the suit against Doosan, claiming it was not properly carrying out its obligations as a fellow shareholder.

Doosan Infracore had earlier agreed to seek an initial public offering of the Chinese unit to raise funds, or push for a stake sale if the public offering failed. Neither of these promises were carried out, mainly due to sluggish business conditions in China.

(khnews@heraldcorp.com)