STIC sells partial stake in Daesung Eltec in block deal The Korean PE firm is still the largest shareholder in the auto part company

Translated by Ryu Ho-joung 공개 2020-03-13 08:00:19

이 기사는 2020년 03월 13일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korea’s STIC Investment has sold its partial stake in Daesung Eltec in a block deal, in a surprise move to facilitate the sale process of the Kosdaq-listed company.

STIC Investment announced in a regulatory filing on Tuesday that it has sold 10.41 percent of its portfolio company Daesung Eltec for about 9.6 billion won in a block transaction.

The sale has reduced the Seoul-based firm’s stake in the auto part company from 55.92 percent to 45.51 percent. The counterparty of the transaction is reportedly U.K.-based Fox Capital Limited.

STIC acquired a majority stake in Daesung Eltec, which specializes in developing and manufacturing the car AVN (Audio, Video, Navigation) system, back in 2013. Last month the firm put the company up for sale and hired Deloitte Anjin to handle the so-called pre-marketing talks with potential buyers.

Industry watchers are paying attention to the background of the block sale, with many of them seeing the move as an attempt to sweeten the deal by reducing burden of potential investors, as well as to lock in gains in advance by making a partial exit.

While STIC remains to be the largest shareholder in Daesung Eltec, its reduced stake will likely result in less than expected transaction value of the planned sale.

The estimated value of shares owned by existing shareholders – including control premium – is now expected to be between 60 billion won and 70 billion won, down from the initial estimate of up to 80 billion won. Still, the total transaction amount is expected to be larger than that because new shares issued by the company will be included in the sale.

One of the factors that can affect the sale process is Daesung Eltec stock’s volatility. After the block sale was announced, Daesung Eltec shares closed at 907 won on Tuesday, down more than 20 percent from its recent high of 1150 won last Thursday.

(By reporter Choi Ik-hwan)
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