A handful of private equity firms and a local builder proposed Wednesday to buy the controlling stake in formerly debt-ridden South Korean builder Kumho Industrial Co., whose sales package includes major shares in the country's No. 2 air carrier.
  

At least four investment firms have submitted letters of intent to get a hold of the construction firm, including IBK Securities-Keistone Partners, Jabez Partners Co., MBK Partners, and IMM Private Equity, according to investment bank industry sources.
  

Midsize builder Hoban Construction Co., ranked No. 15 among local construction firms as of 2014, also submitted a letter of intent, they said. It currently owns a 4.95-percent stake in Kumho Industrial and reportedly has up to 300 billion won in available capital for the stake purchase.
  

Late last month, creditor banks Korea Development Bank and Credit Suisse announced the sale of a 57.5-percent stake, or about 19.55 million shares, in Kumho Industrial, which had just graduated from a five-year debt workout program in December. The builder is the de facto holding company of Kumho Asiana Group, which has Asiana Airlines Inc. under its wing.
  

The builder had been struggling from mounting debt amid adverse real estate market conditions. Kumho Asiana Group, its parent firm, had also been mired in chronic debt after purchasing a 72.1-percent stake in Daewoo Engineering & Construction Co. in 2006 for 6.4 trillion won ($5.8 billion), a deal that was mostly funded by a group of financial investors, including KDB.
  

The construction company is ranked No. 20 among local builders, according to an annual report released in 2014, but its true value lies in some of its more profitable affiliates over which it holds control.
  

Kumho Industrial is a major shareholder of Asiana Airlines with a 30.08-percent stake. Further down the complex web of cross-shareholding, the flight operator has controlling stakes in local low-cost carrier Air Busan Co. and three other affiliates.
  

Due to such perks that come with the stakes, as well as the heated competition among buyers, industry watchers say the sale may garner up to 1 trillion won.
  

Despite having a three-week period to submit a letter of intent, none had come forward until the final day, as prospective buyers waited for potential competitors and weighed the pros and cons of acquiring the Kumho Asiana Group package.
  

Prior to the bid's closing, president of Kumho Asiana Group Park Sam-koo was seen as the likely winner for the stake purchase.
  

The 70-year-old was granted the right of first refusal in the bid, meaning that he has the primary option to either buy about 50 percent in the Kumho Industrial stake or not enter the bid at all, depending on how much he needs to pay to outbid rivals. However, industry watchers say the entry of other competitors have put pressure on Park, as some may have offered to pay a much higher price for the coveted shares than what he can afford.
  

KDB and Credit Suisse will draw up a shortlist of contenders after evaluation next month, although the details of the schedule have not been disclosed.
  

Kumho Industrial closed at 26,350 won on Wednesday on the main local bourse, down 3.48 percent from the previous trading session when the broader KOSPI gained 0.73 percent.
  

Since the news of the stake sale, shares of Kumho Industrial had been heading upwards, hitting an intra-day high at 31,400 won on Feb. 13, the highest seen in nearly seven years. Asiana Airlines shares also touched a new high during Monday's trading session at 9,400 won, last reached in September 2011.  The carrier's shared ended down 3.49 percent on Wednesday. (Yonhap)