STIC-led group preferred bidder for Korean weapons manufacturer
A consortium formed by South Korean private equity firm STIC Investments and brokerage Hana Daetoo Securities has been selected as the preferred bidder for a stake in South Korea's LIG Nex1. The weapons manufacturer is offloading a 49% interest worth around $440 million.
The firms look set to pay KRW400-500 billion ($354-$443 million) for the stake, according to a source. Their offer includes conditions relating to a possible IPO by LIG Nex1. Previous estimations by local media had put the deal value at around KRW500 billion.
Four local private equity firms and a listed European defense company reportedly submitted bids for the private defense company earlier this month. IMM and Actium were among the PE investors keen on the asset. Citigroup is managing the deal.
LIG Nex1 is owned by LIG Corp, which is part of the LIG Group, one of a number of Korean chaebols looking to divest assets in order to service debts or boost capital for their core businesses. LIG Engineering & Construction filed for court receivership last year.
The company produces anti-submarine and cruise missiles as well as weapons systems. It posted an operating profit of KRW30.3 billion ($26.6 million) in 2011, down from KRW42 billion in 2010.
On Thursday, South Korea's private equity sector - which has become increasingly active in recent months - saw its joint largest transaction of the year with MBK Partners' KRW1.1 trillion ($1.1 billion) investment in Woongjin Coway.
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