Glenwood takes legal action over disputed Korea transaction
An arbitration proceeding has been initiated in Singapore regarding a dispute between Glenwood Private Equity and BPEA EQT over the failed sale of Korea-based industrial films producer PI Advanced Materials.
Glenwood recently sold its 54% stake in PI Advanced to France-headquartered strategic investor Arkema for an enterprise value of EUR 728m (USD 817m), but this transaction only materialised after an agreed exit to BPEA EQT fell through last December.
Glenwood said at the time that BPEA EQT’s action was contractually invalid and urged the firm to make good on the agreement. A subsequent filing in February, confirming the termination of the sale agreement, noted that Glenwood would proceed with legal action against BPEA EQT if it did not pay a penalty fee. This led to the current arbitration, according to a source close to the situation.
A separate source familiar with BPEA EQT’s position said that the sale agreement included a long-stop date by which all closing conditions had to be met, including regulatory approvals from overseas authorities. These approvals didn’t arrive in time, BPEA EQT exercised its right to withdraw from the transaction. The first source claimed that approvals were in place by the deadline.
Glenwood and BPEA EQT both declined to comment on the matter.
PI Advanced was established in 2008 as a joint venture between SKC, a chemicals-focused subsidiary of SK Group, and Kolon Industries. It went public in 2014. The company produces polyimide films for flexible printed circuit boards and graphite sheets used in mobile devices and electric vehicles (EV). It claims to be the global market leader with a 30% share.
Glenwood acquired a 54% stake in PI Advanced – 27% apiece from SKC and Kolon – for USD 512m in 2020. The sale to BPEA EQT, agreed in June 2022, was worth KRW 1.28trn, or KRW 80,302 per share, a substantial premium to the trading price at the time of around KRW 50,000 per share. By December, PI Advanced’s stock had fallen to KRW 30,700.
The company ended July 19 at KRW 33,400 with a market capitalisation of approximately KRW 981bn. It has traded between KRW 27,400 and KRW 44,950 over the past 12 months.
Revenue reached KRW 261.8bn in 2022, down from KRW 301.9bn a year earlier, which Arkema said was a temporary effect, driven by large destocking in the global consumer electronics market. Net profit for the year fell from KRW 64bn to KRW 41.8bn.
Glenwood was established in 2014 and specialises in corporate carve-outs. The firm raised a KRW 450bn debut fund and followed up with a second vehicle of KRW 900bn, which closed last year. Glenwood’s first two investments predated Fund I so they were completed on a deal-by-deal basis, relying on capital from Korean financial institutions and working with co-investors.
BPEA EQT – then known as Baring Private Equity Asia – was the partner on a USD 600m carve-out of Halla Cement from LafargeHolcim.
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