Dongkuk Steel Mill Co., South Korea's third-largest steel maker, said Friday it plans to sell its headquarters building in downtown Seoul to a local insurer as part of its efforts to bolster its financial status.

Dongkuk's board of directors approved the deal worth 420 billion won ($389 million) to sell the building to Samsung Life Insurance Co., an insurance unit of the country's top conglomerate, Samsung Group, it said.

The sale of the 28-story building in downtown Seoul, one of the steelmaker's prime assets, came as the company has been struggling to reduce mounting debts amid a protracted slump in the steelmaking sector.

Dongkuk Steel saw its sales slump 9.3 percent on-year to reach 6.68 trillion won, while logging 20.4 billion won in operating losses.

The deal also came at a time when its chairman, Chang Sae-joo, is being investigated by prosecutors on suspicion of misappropriating company funds.

On Friday, Dongkuk shares gained 0.46 percent to end at 6,610 won on the Seoul bourse, and Samsung Life Insurance increased 2.88 percent to 107,000 won, outperforming the broader market that slipped 0.63 percent. The announcement was made during trading hours. (Yonhap)