Kumho Industrial to sell assets to private equity

Reuters, citing the Korea Economic Daily, noted that a 12.3% stake in Daewoo Engineering & Construction would be among the assets put up for sale. The private equity firms submitted letters of intent to purchase assets on Friday and a list of preferred bidders is expected to be announced next week.

Parent company Kumho Asiana is one of a number of second- and third-tier South Korean chaebols under pressure from domestic banks to offload non-core assets in order to settle their debts.

Kumho's problems can be traced back to the highly leveraged KRW6.4 trillion (then $5.6 billion) purchase of Daewoo Engineering & Construction in 2006. It sold a majority stake to Korea Development Bank (KDB) for KRW2.9 trillion (then $2.5 billion) in December 2009. Reports at the time noted that the bank would buy 50% of the company plus one share through its private equity investment vehicle.

KDB and other creditors placed Kumho Industrial into a debt restructuring program in late 2009 and directly acquired it several months later. Kumho Asiana also sold off Kumho Rent-A-Car to MBK Partners and Korea Telecom for KRW300 billion last year and Kumho Life Insurance was offloaded to a fund backed by KDB.

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• Topics
• North Asia
• Infrastructure
• Restructuring
• South Korea
• Infrastructure
• Distress
• MBK Partners
• Korea Development Bank