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KDB to help Halla take over Mando
Writer : Sender
Jan 28, 2008
An investment fund owned by the Korea Development Bank will participate as a financial investor in a bid for Mando, an automobile parts manufacturer, along with the National Pension Service, KCC and Halla Engineering & Construction, the bank said Friday.
Halla E&C, a construction arm of Halla Group, signed a contract on Jan. 21 to acquire a 72.4 percent stake in Mando for 651 billion won ($686 million) from its current owner, Sun Sage, an investment consortium led by JP Morgan Partners and Affinity Equity Partners.
The KDB Private Equity will share the burden with its partners. The fund will invest some 200 billion won to become the third largest shareholder of Mando. NPS plans to invest 20 billion won.
Halla E&C will buy a 17.9 percent stake, raising its shareholding in Mando to 26.9 percent. As Chung Mong-won, chairman of Halla E&C and vice chairman of Halla Group, holds an 8.9 percent stake in Mando, Halla's shareholding will increase to 35.8 percent to become the firm's largest shareholder.
KCC also plans to invest some 260 billion won as a strategic investor to acquire 29.99 percent of Mando.
It is rare for the KDB to invest such a large amount of money in a firm. Market watchers say the investment shows the KDB is moving to play a bigger role in the corporate merger market
The KDB Private Equity said it has already raised enough funds to become a shareholder in Mando.
"We had information that Sun Sage was contacting investors and finding ways to return Mando to the market," said Im Hae-jin, an official of the equity fund. "Since 2005, we have monitored the firm and made preparations to buy shares in Mando."
Im said the fund is pursuing an investment yield of 20 percent, and the gain could rise sharply if Halla succeeds in listing the firm on the stock market in a few years.
The state-owned lender bought stocks in financially troubled companies following the 1997-98 Asian financial crisis as part of the government's corporate restructuring programs. Since then, it has increased equity investments by setting up investment arms as Korean firms were recovering from the shocks of the crisis.
Corporate stocks owned by the KDB are currently estimated at 30 trillion won.
(Source: The Korea Times)
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