Bankrupt Woongjin halts $1.1b Coway sale to MBK

Woongjin agreed to a sell 31% of its Coway unit to MBK in order to reduce debts that had spiraled following heavy investments in solar energy and the impact of a slowing South Korean real estate market on the company's construction and finance businesses. It only acquired the construction business in 2007.

After applying for receivership in Seoul District Court, Woongjin said in a regulatory filing that a shareholder meeting scheduled for today, at which the sale to MBK would have been put to a vote, will now take place on November 9. At best, the acquisition is likely to be delayed by the court receivership process; at worst, it won't happen at all as senior lenders carve up Woongjin's assets.

Coway had a 55% share of the Korean water purifier market last year, and 44% of the market for air purifiers. It posted a profit of KRW161.2 billion on sales of KRW1.82 trillion.

MBK Partners was set to pay KRW50,000 per share - a 33% premium to the previous closing price - for the holding, of which 28.4% would come from Woongjin Holdings and the remainder from other shareholders. It would have been Korea's joint-largest private equity transaction of the year.

The private equity firm stepped in after a bid from KTB Private Equity, an affiliate of KTB Investment & Securities, fell apart.

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• Topics
• Buyouts
• North Asia
• Regulation
• Restructuring
• South Korea
• MBK Partners
• Distress
• buyout
• regulation