Private Equity Korea » Daewoo International

KAMCO Begins Procedures in Kyobo Ins. Sale

Ross Geesman — Fri, 03 Feb 2012 09:17:22 +0000

According to a recent report from Money Today’s the bell, KAMCO has begun procedures to dispose of its stake in Kyobo Life Insurance. Please see our translation for the details.

Korea Asset Management Corporation (KAMCO) began the valuation process for Kyobo Life Insurance on Feb 1^st. The national asset manager will choose the preferred bidder in May for the sale of its 9.9% stake in the insurer.

According to finance industry sources, KAMCO plans to officially announce the sale in March, after the valuation has been completed. Notice will be sent to domestic and foreign institutional investors, letters of Intent will be received until April, and the preferred bidder will be determined in May.

Over the coming weeks, KAMCO will be inspecting the insurer’s financial situation, calculating the enterprise value and the disposal price. Given that Kyobo Life is traded over-the-counter, KAMCO will be very cautious in calculating the price.

An M&A industry source said, “KAMCO doesn’t have a controlling stake in the company so it is unlikely to receive a premium. Last year at book value, the shares were valued at 250 thousand won, so they are predicted to sell for around 300 thousand won.”

Domestic and foreign investors have shown their interest in the sale despite the lack of control.

An individual in the M&A industry said, “Domestic and foreign PE firms, and financial holding companies are interested in the stable dividend income, and the margin from an IPO. If the price is appropriate, the sale will most likely be accomplished smoothly.”

He also said, “Domestic financial holding companies also show great interest in taking over Kyobo Life to use as a distribution channel for insurance. Furthermore, the takeover the stakes of Kyobo Life could become a starting point for a purchase of Daewoo’s stake in the company.”

Last December, Daewoo International selected Woori Investment & Securities Co., Ltd. and Macquarie Securities as consultants. However the negotiation to dispose its 24 percent stake in Kyobo Life has yet to get under way. Daewoo International is still exploring various methods for achieving liquidity.

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POSCO to try entering shipping industry with Daewoo Logistics

Stephanie Lim — Sun, 28 Aug 2011 01:07:46 +0000

Maeil Business News has reported that the nation’s no. 1 steelmaker POSCO is attempting to enter the shipping industry by acquiring Daewoo Logistics, a small shipping company that has been under court receivership. POSCO spends about 2.7 trillion won ($2.51 billion) on logistics every year and has been looking to acquire a logistics company to save related costs.

POSCO had tried to take over Daewoo Logistics in 2009, but failed to do so due to strong opposition from the shipping industry. However, industry analysts predict that POSCO intends to integrate logistics on a group level and cut costs by letting Daewoo International take over the shipping company in its stead.

Since Daewoo International has been investing in Daewoo Logistics, the former now holds a 20.27 percent stake in the latter and plans to secure management rights by purchasing additional stakes currently being held by Korea Finance Corporation (KoFC) and Public Officials Benefit Association (POBA).

Unfortunately for POSCO, the shipping industry is set on keeping the steel giant out and plans to announce an official opposition to POSCO’s advancement. Major shippers like Hanjin Shipping and Hyundai Merchant Marine are concerned that POSCO’s entry would decrease their orders. The nation’s current shipping law stipulates that large owners cannot enter the shipping industry.

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Daewoo Intl. plans to sell Kyobo Insurance

Stephanie Lim — Wed, 22 Jun 2011 05:28:14 +0000

Daewoo International, now part of POSCO Group, is planning to sell its 24 percent stake in Kyobo Life Insurance which is valued at about 1 tn won ($931 mn).

Although it is only a minority stake, Kyobo’s majority shareholder, CEO Shin, also does not have a large stake, so a hostile takeover may be possible if the stake is sold to the “wrong” party. POSCO will be sure that the sale does not endanger the management of Kyobo.

SIs, FIs, and PEFs, are all potential buyers of the stake. Shinhan PE and Affinity Equity Partners have already shown interest in the deal.

Source: translated from The Bell

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Irae CS selected as preferred bidder for Korea Delphi

Stephanie Lim — Mon, 13 Jun 2011 07:18:19 +0000

Irae CS consortium, consisting of Irae CS and Daewoo International, was selected as the preferred bidder for the 42.3 percent stake of Korea Delphi. Irae has bid 195.5 billion won for the stake and signed an SPA on June 10. This acquisition, combined with Daewoo’s 7.7 percent stake, brings the consortium’s total ownership to 50 percent.

Irae has already submitted 19.5 billion won, 10 percent of the purchase price, to HSBC and KDB, the advisors to the sellers, and will conduct due diligence of Korea Delphi for the next three weeks.

Irae CS is a relatively unknown, non-listed auto parts maker, but had a strong balance sheet and EBITDA of 22 billion in won 2010.

Source: translated from The Bell

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Five candidates to participate in auction of Korea Delphi

Stephanie Lim — Mon, 04 Apr 2011 07:09:01 +0000

Five parties, three SIs and two FIs, were selected to compete for a 50 percent stake in Korea Delphi. Out of the seven interested buyers, the sellers chose Kolon, Erae CS (in consort with Daewoo International), KB Auto Tech (a subsidiary of Dongkuk), MBK Partners and KTB-Shinhan PE consortium. Han & Company and Atinum Partners were not selected.

Due diligence will begin soon and the main auction will take place at the end of April.

Source: translated from MoneyToday

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POSCO’s acquisition of Daewoo International receives approval from antitrust watchdog

Brett Moffat — Wed, 01 Sep 2010 06:38:59 +0000

The Korea Fair Trade Commission has approved POSCO’s acquisition of a 68.15% stake in Daewoo International, reported Money Today.

The report credited the information to the regulator.

As reported, Korean steel giant POSCO has signed an agreement to acquire 68.15% in Daewoo International, the listed South Korean importer and wholesaler, for just over KRW 3.37trn (USD 2.84bn).

Source: Money Today

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POSCO acquires Daewoo International for U$2.8 billion

Brett Moffat — Mon, 30 Aug 2010 09:59:48 +0000

POSCO, the South Korean steelmaker, announced today, August 30, it signed a deal with Korea Asset Management Corp. (KAMCO) to acquire Daewoo International for KRW 3.37 trillion ($2.8 billion), the Maeil Business reported.

The article states -

The purchase amount, which was 2.54% lower than POSCO offered originally, corresponds to 68% of outstanding shares or 68,681,566 shares. POSCO should pay the amount by the end of next month.

The deal also allows KAMCO to recover public money worth 1.75 trillion won injected into the trading company since it went bankrupt in 1999.

The acquisition will bring about a momentum for POSCO to diversify its business and explore energy resources overseas.

Since Chief Executive Chung Joon Yang took office, the steelmaker has accelerated its advance into developing iron ore mines abroad. POSCO expects Daewoo International will create a synergy while it will be doing so in the future.

Daewoo International has 94 business operations in 58 countries, trading with 180 countries. More than 97% of sales are related to export. A natural gas project in Myanmar operated by Daewoo International will see commercial production from 2013 and a nickel mine in Madagascar will also begin production from next year.

Source: Maeil Business

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POSCO to close Daewoo International deal

Brett Moffat — Wed, 25 Aug 2010 11:04:23 +0000

POSCO, the preferred bidder in the sale of Daewoo International, will likely sign on a final contract on 30 August, reported Money Today.

The report cited several sources close the situation as saying that the Public Fund Oversight Committee has held a provisional meeting to approve the terms of the sale to Posco.

The committee will call for a formal meeting on 30 August to approve the sale and plans to sign the final contract that day. The sale price is about KRW 3.3tn (USD 2.77bn), the item said.

As reported, Posco was selected as the preferred bidder for a 68.1% stake in Daewoo International, the listed South Korean wholesaler.

Source: Money Today (translated)

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PEFs interested in Kyobo Life stake

Brett Moffat — Thu, 01 Jul 2010 02:21:48 +0000

Private equity funds Carlyle and Affinity, along with some Hong Kong-based investors, are in talks to acquire 24% stake in Kyobo Life, an unlisted South Korean insurer, reported Money Today.

The report cited industry sources as saying the funds conducted due diligence in Kyobo Life recently. Citing the same sources, the report said that the funds received “nods” from Posco, the potential seller of the stake, in acquisition talks.

The report estimated the stake to be worth KRW 850bn (USD 697m).

As reported earlier, Posco, the preferred bidder for Daewoo International, may sell the stake in Kyobo Life held by Daewoo International after it acquires the listed South Korean wholesaler.

Source: Money Today (translated)

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POSCO to finish due diligence on Daewoo

Brett Moffat — Wed, 23 Jun 2010 06:20:22 +0000

POSCO is likely to finish its due diligence on Daewoo International this week, Asia Economy reported yesterday.

The report cited a Daewoo insider, who said the inspection team from POSCO recently finished a review on Daewoo International’s overseas subsidiaries and Q-and-A sessions with key workers.

As reported earlier, South Korean steel maker POSCO was selected as the preferred bidder for a 68% stake in Daewoo International. The stake is held by creditors, including KAMCO.

According to the earlier report, Posco offered KRW 3.4tn (USD 2.87bn) for the stake.

Source: Asia Economy (translated)

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