The South Korean Public Fund Oversight Committee (PFOC) has chosen Doosan Heavy Industries & Construction Co Ltd as its preferred bidder for a 51 per cent controlling stake in Daewoo Heavy Industries & Machinery Co.

The committee told Xinhua News it planned to conclude sale talks within a month. If the talks collapse, talks would begin with Hyosung Corporation, the second highest bidder.

The PFOC said Korea Asset Management Corp (KAMCO), which is arranging the sale of the machinery maker, would give Doosan Heavy exclusive rights to engage in talks with KAMCO for one month over the terms of the sale of the company.

The PFOC is reported as saying: "We selected Doosan Heavy as the preferred bidder after assessing prices and other bidding terms proposed by seven bidders".

Bidding prices were not revealed.

Daewoo Heavy reported sales of 2.3 trln won (USD2 billion) in sales in 2003, and accounts for 42 per cent of the South Korean heavy equipment market. Daewoo Heavy separated from former Daewoo Heavy Industries Co Ltd in 2000 following the collapse of the Daewoo Group.

Sources at Daewoo would not comment on the bidding process.