Woongjin forced to resell Coway after just three months
Cash-strapped Woongjin Group announced on June 27 that it has decided to resell its stake in water purifier rental firm Woongjin Coway, which it just acquired in March this year.
“We will sell Woongjin Coway within a year,” Woongjin said in a statement. “As a pioneer of the local rental business, we had to think deeply about selling Coway. But we have reached a final decision, thinking that it is the best way to minimize the impact on the market.”
The company also added that it is expecting Coway to be attractive for buyers in the market. Woongjin has picked Korea Investment & Securities as its manager for the deal to sell its entire 25.08 percent stake in Coway.
The decision came only three months after the group’s educational contents provider arm Woongjin Thinkbig and Korean private equity firm STIC Investment closed the deal on March 22 to buy back a 22.17 percent stake in Coway from MBK Partners.
The company explained that it reached consensus after one of Woongjin’s subsidiaries, Woongjin Energy, received a “disclaimer of opinion” for its financial statements from accounting auditor Ernst & Young Han Young and had to apply for a debt workout program. This happened immediately after the company bought Coway in March. Credit rating agency NICE Investor Service also cut Woongjin Group’s credit rating to BBB-.
In 2013, Woongjin sold off Woongjin Coway for 873 billion won to private equity firm MBK Partners as part of its workout to remove leverage from a series of acquisitions, including builder Kukdong E&C.
By Song Seung-hyun (firstname.lastname@example.org)