이 기사는 2020년 05월 01일 08:00 thebell 에 표출된 기사입니다.

South Korea’s IMM Private Equity (IMM PE) plans to recapitalize its portfolio company Linde Korea one year after its acquisition of the company.

IMM PE is exploring the possibility of recapitalizing the industrial gas company, which was acquired by the PE firm at the end of April 2019, sources familiar with the matter said on April 27. The PE firm won’t have to pay early redemption charges.

It is said several brokerage houses and banks have contacted IMM PE over the past few months to be hired as an arranger of the recapitalization while the PE firm is reportedly discussing related matters with Shinhan Bank, which arranged its initial acquisition financing. Shinhan Bank is also a limited partner of IMM PE’s flagship funds, RoseGold 2 and RoseGold 3.

The PE firm has decided to increase its borrowing this time rather than simply refinancing its acquisition of the company. The firm PE financed approximately 750 billion won via its lead arrangers Shinhan Bank and Shinhan Investment Corp. when acquiring Linde Korea for 1.3 trillion won a year ago.

IMM PE anticipates it could lower an interest rate through its recapitalization. Acquisition financing at an interest rate of three percent level has become common in the industry amid lowered benchmark interest rate. Absence of investment opportunities in the industry and Linde Korea’s ability to generate stable cash flow are likely to lure investors as well.

The fact that the local industrial gas market is dominated by few major players including Linde Korea and Daesung Industrial Gases is also positive for Linde Korea’s valuation. Yet, the PE firm is unlikely to be in a hurry to recapitalize the company amid subdued market condition due to the outbreak of the coronavirus.

Linde Korea supplies industrial and specialty gas to companies in various industrial fields including semiconductor, petrochemical, and steel making. IMM PE acquired assets including its offices in Pohang, Giheung and Seosan.

IMM PE’s acquisition of Linde Korea is meaningful that it marks the PE firm’s first multi-trillion-won deal, which has enabled the firm to strengthen its presence in the domestic PE industry as a major buyout fund.

(By reporter Kim Hye-ran)