Private Equity Korea » KAMCO

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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KAMCO preparing for Ssangyong E&C sale

Stephanie Lim — Wed, 03 Aug 2011 08:38:41 +0000

The Korea Asset Management Corporation (KAMCO) announced on August 2 that they are selecting accounting and legal advisors for the sale of Ssangyong Engineering & Construction.

KAMCO, the largest shareholder in Ssangyong E&C, plans to sell 50.07 percent, or 14,906,000 shares, of the latter.

More information about the process to select advisors can be found on the KAMCO website here.

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Creditors may sell Daewoo Elec. to Electrolux AB

Stephanie Lim — Wed, 22 Jun 2011 09:23:53 +0000

Various news sources have reported that the creditors of Daewoo Electronics may be looking for a new buyer for their collective 97.5 percent stake. According to the Korea Herald, state-owned debt clearer KAMCO holds the largest stake in Daewoo Electronics with 48 percent, followed by Korea Exchange Bank with 6.6 percent, and Shinhan Bank with 5.8 percent.

According to Maeil Business News, the creditors could end negotiations with Entekhab Industrial Group and resume talks with second preferred bidder Electrolux AB since their deal with the former has been falling apart.

Swedish Electrolux, the world’s second-largest appliance maker, will complete due diligence on Daewoo Electronics this week and decide whether or not it will initiate talks with creditors.

During the initial bidding in 2010, Electrolux bid 600 billion won ($553.5 million) for the stake, and then offered to pay an additional 30 billion won in September when the creditors were in negotiations with Entekhab. However, some market observers have speculated that Electrolux will seek a price cut, as the value of the Korean firm has deteriorated as of late.

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KAMCO to sell DSME, Ssangyong E&C, Kyobo Life

Stephanie Lim — Mon, 20 Jun 2011 01:28:28 +0000

Maeil Business News has reported that the Korean Asset Management Corporation (KAMCO) will be putting its shares of restructured companies on the market.

According to the report, in 1997, KAMCO raised 39.2 tn won ($36.1 bn) for the NPA Fund to purchase commercial bank debts valued at 111.5 tn won. Some of these non-performing loans were converted to stock shares through debt-equity swaps. 45.5 tn won out of the original 11.5 tn won debt was recovered through stock sales and other methods. At present, there is 32.4 tn won left in outstanding debt.

KAMCO will sell the remaining bonds for cash. Those unavailable for cash transfers will be converted to spot goods.

Accordingly, KAMCO’s shares of listed stocks like Daewoo Shipbuilding & Marine Engineering (DSME) and Ssangyong Engineering & Construction (Ssangyong E&C) will be sold through M&As and other methods. Block sales will be made as a last resort.

Non-listed companies like Kyobo Life Insurance will be sold through a competitive bid.

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Ssangyong E&C sale delayed until next year

Brett Moffat — Tue, 07 Sep 2010 00:26:55 +0000

The effort of South Korean state-run KAMCO to sell a stake in Ssangyong Engineering and Construction is delayed until next year, the E-Today reported.

The report cited an unspecified insider at KAMCO as saying the company is planning to start a review to sell the stake after the second half of this year.

The insider was cited as saying that he expects KAMCO could place the stake up for sale in 1H11 at the earliest or 1H12 at the latest.

KAMCO holds a 50.07% stake in Ssangyong Engineering, the listed South Korean construction company.

Source: E-Today (translated)

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Daewoo International Update: Posco, Lotte possibly interested in entire stake

Brett Moffat — Wed, 24 Mar 2010 03:29:29 +0000

Posco and Lotte, the potential bidders for Daewoo International, will likely offer to buy out the entire 68% stake held by KAMCO, reported Money Today.

The article, citing an unnamed source, stated that both companies expressed willingness to buy more than the 50% stake in Daewoo International currently on offer, due to the fact that the conversion of USD 300m convertible bonds (CBs) in Daewoo International would start in July, so the actual stake could drop if holders of CBs turn them into shares.

The report added that both the bidders are equally eager about the acquisition, and therefore, are likely to offer a higher price for a larger stake.

See here for all posts on the sale of Daewoo International.

(Source: Money Today)

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Ssangyong E&C: KAMCO may put off sale to 2H10

Brett Moffat — Mon, 22 Feb 2010 00:35:14 +0000

Korea Asset Management Corp (KAMCO) has likely put off the sale of Ssangyong Engineering and Construction (E&C), the listed South Korean construction company, to the second half of the year, Financial News Daily reported.

The report cited an unspecified M&A source, who stated that the Korean state-owned fund manager decided to sell its stake in Ssangyong during that time frame.

KAMCO holds a 50.07% stake in the company.

According to their website, KAMCO’s role is:

Management and Operation of Non-performing Assets Fund
Acquisition and Resolution of NPAs from financial institutions
Implementing Work-out programs for Distressed Companies
Management of Government Owned Properties and Resolution of Tax Arrears
Supporting the Recovery of Consumer Credit

(Source: Financial News Daily, KAMCO website)

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Daewoo International Update: Single bidder could prevent sale

Brett Moffat — Thu, 18 Feb 2010 05:03:57 +0000

The stake sale in Daewoo International may fall through because South Korean regulations do not allow single bidder auctions for state-owned assets, according to this article in Korea’s Money Today newspaper.

The unsourced report noted that only Posco is expected to bid for a stake in the listed South Korean wholesaler.

As reported, state-run Korea Asset Management announced it would sell 50% plus one share in Daewoo International, and expects to receive proposals by 24 February.

See previous post Daewoo International stake to go on sale for more information.

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Daewoo International: KAMCO and creditors could sell up to 68% stake

Brett Moffat — Tue, 26 Jan 2010 02:30:38 +0000

Korea Asset Management (KAMCO) and creditors of South Korean Daewoo International will likely sell at least 50% and up to 68% of their stake in Daewoo International, reported Yonhap News here.

The report, which cited industry sources, claimed that the committee and other creditor banks decided they would consider selling their entire 68% stake, or at least a 50% stake, in order for a potential buyer to secure managerial rights.

The total 68% stake that is potentially for sale is jointly held by state-run KAMCO, The Export-Import Bank of Korea, Korea Development Bank and other creditors.

The report also claimed that KAMCO plans to sell the 24% stake in Kyobo Life held by Daewoo International together with the stake in latter to the buyer. Citing the sources, the report stated that the Public Fund Oversight Committee plans to confirm the sale method at a meeting, scheduled tomorrow [27 January]. After resolving the sale plan in the meeting, the Public Fund Oversight Committee is expected to announce the sale early next month, the report added.

For a more information about Daewoo International and the proposed sale see previous posts ’35% Daewoo International stake to go on sale‘ and ‘POSCO says Daewoo Int’l most interesting‘.

(Source: Yonhap News)

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35% Daewoo International stake to go on sale

Brett Moffat — Thu, 07 Jan 2010 02:15:49 +0000

KAMCO to invite bidders for Daewoo Int’l this month

(The Korea Herald)

The state-run Korea Asset Management Corp. (KAMCO) will put Daewoo International Corp. for sale late this month as part of efforts to offload state-owned stakes in the trading company, the company said Wednesday.

The national committee in charge of managing public funds plans to send invitational letters to investors around Jan. 25, according to the debt clearer and financial authorities.

KAMCO, the biggest shareholder in Daewoo International, a trading company which is also focused on overseas resource development, has been moving to sell a 68 percent stake, jointly held by the state-run Korea Finance Corp., the national pension fund and other state agencies. The stake is valued at 2.2 trillion won ($1.9 billion).

In the same invitation, the committee is also expected to put a 40 percent holding in Kyobo Life Insurance Co. up for sale. The holding accounts for Daewoo International’s 24 percent share and KAMCO’s 9.9 percent interest with 5.9 percent held by the Export-Import Bank of Korea.

Source: Kisline (Click to enlarge)

In this article Daewoo International Sale to Start in Earnest, from Maeil Business Newspaper in Novermber of 2009, it stated that Korean company POSCO is interested in acquiring Daewoo International, due to the synergies they could reap through utilizing the trading company’s global network.

Quoting POSCO CEO Lee Dong-hee from mid-October 2009, as saying:

“(the) proportion of (POSCO’s) exports has surged (from) 35 percent to 38 percent which calls for the company to expand into the overseas market,” adding

“(the) sale of Daewoo International has caught our attention as we are currently considering starting a new business in the energy industry or the commodities industry,” .

Daewoo International

Daewoo International (047050:KS) was spun off from Daewoo Corporation in 2000, as part of the group’s “workout” restructuring, emerging as a company dedicated to international trading, manufacturing and distribution.

On August 31, 2009, the Company established a Australia-based wholly owned subsidiary, Daewoo International Australia Holdings Pty Ltd, to acquire 5% stake in Australia-based Narrabri coal mine. including international trading, manufacturing, sales, and resource development

In 2008, Daewoo International had sales of KRW 11.045 trillion, with an operating profit of KRW 156 billion, with a market cap. of KRW 3.5 trillion at the time of writing.

(Sources: Maeil Business Newspaper, Kisline, Korea Herald, Daewoo International, Bloomberg)

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