Orix named preferred bidder for Korea’s STX Energy

The parent company announced its choice of bidder in a regulatory filing. STX is willing to sell up to 49% of the energy business in a deal that could be worth as much as KRW400 billion ($357 million). A prospective rival bidder, local GP Atinum Investment, said talks with STX had ended due to a failure to agree on terms and conditions.

STX Group and its affiliates own 91% of STX Energy with the rest held by minority shareholders. STX Energy is involved in electric power generation and petroleum distribution and recorded KRW1.02 trillion in sales and KRW66.3 billion in operating profit last year.

The decision to offload part of the asset was driven by STX Group's need to strengthen its balance sheet. The company also plans to merge two other units, STX Metal and STX Heavy Industries, and divest other non-core assets.

South Korea has seen a number of large private equity deals in recent months as several long-plan auctions came to fruition and a number of conglomerates found themselves under pressure from creditors to sell off assets.

Last month, MBK Partners agreed to pay KRW1.1 trillion for a 31% stake in Woongjin Coway; Affinity Equity Partners, Government of Singapore Investment Corp. (GIC), Baring Private Equity Asia and IMM Private Equity purchased 24% of Kyobo Life for KRW1.2 trillion; Ontario Teachers' Pension Plan (OTPP) snapped up a 10% stake in the same company for KRW470 billion; and IBK Capital and Kstone Partners concluded a KRW415.5 billion investment in Daewoo Engineering & Construction.

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• Topics
• Restructuring
• Industrials
• North Asia
• Japan
• ORIX Capital
• South Korea
• energy
• Commodities