Woongjin Climbs on Court’s Approval of Coway Sale: Seoul Mover
Woongjin Holdings Co. (016880) advanced to a four-week high in Seoul stock trading after it won court approval for the sale of a controlling stake in water-purifier maker Woongjin Coway Co. to a private equity firm.
Woongjin Holdings jumped by the daily limit of 15 percent to 2,940 won in Seoul, its highest close since Oct. 12. Woongjin Energy Co. (103130) also advanced 15 percent to 2,435 won as the benchmark Kospi index fell 0.2 percent. Investors expect the financial situation of companies in the Woongjin group to improve after the sale, according to Chung Yoo Seok, an analyst at Kyobo Securities Co. (030610) in Seoul.
Woongjin Holdings will sell its 31 percent stake to MBK Partners Ltd. on Jan. 2 for 1.2 trillion won ($1.1 billion) after winning court approval on Nov. 9, the Seoul-based company said in a regulatory filing today. The sale was halted after Woongjin Holdings and its unlisted construction unit filed for bankruptcy protection in September.
“Woongjin companies could’ve struggled because they had a lot of debt group-wide, but that may be resolved somewhat thanks to the decision to sell Coway,” Chung said by phone today. “The group stocks will all do pretty well from here.”
Woongjin agreed to sell its stake to MBK Partners in August to reduce debt that swelled after the group took over Kukdong Engineering & Construction Co. and expanded into the solar power business. Woongjin’s creditors and MBK Partners agreed to complete the sale by the end of January and submitted the plan to the court on Nov. 8 for approval.
Woongjin Chemical Co. (008000) advanced 3.1 percent to 629 won, while Coway slid 0.4 percent to 37,950 won.
Coway shareholders will meet on Nov. 27 to approve the sale plan, Coway said in a regulatory filing today.
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