Woongjin Coway Advances as Sale to MBK to Proceed: Seoul Mover
Woongjin Coway Co. (021240), a South Korean water-purifier maker, jumped to a one-month high in Seoul stock trading after its parent and creditors agreed to stick with a plan to sell a controlling stake to MBK Partners Ltd.
Woongjin Coway rose 12 percent to 39,800 won, the highest closing price since Sept. 26., at the end of trading on the Korea Exchange today. Woongjin Holdings Co. (016880), Coway’s biggest shareholder, jumped by the daily limit of 15 percent. The benchmark Kospi index fell 1.7 percent.
Woongjin Holdings, its creditors and MBK yesterday agreed that Woongjin Holdings will proceed with an August contract to sell MBK a 31 percent stake in Coway, Kim Hee Joong, a judge at the Seoul Central District Court, said by phone today. Woongjin Holdings had halted the 1.2 trillion won ($1 billion) sale after it and a unit sought bankruptcy protection last month.
“The anticipation that new management will bring changes and remove uncertainties in the business will also bring positive sentiment to Coway shares,” Lee Sang Koo, a Seoul- based analyst at Hyundai Securities Co. wrote in a report today. The sale may be completed in early 2013, Lee said.
The details of the Coway sale will be discussed later and creditors had agreed to cooperate for a revival of Woongjin Holdings in yesterday’s hearing, according to Kim, the Seoul Central District Court judge. The court on Oct. 11 approved court receivership for Woongjin Holdings and its Kukdong Engineering & Construction Co. unit. Woongjin is selling Coway as part of a plan to cut debt.
Coway’s affiliates also climbed. Woongjin Energy Co. (103130) gained 2.6 percent and Woongjin Chemical Co. rose 1.5 percent.
To contact the reporter on this story: Seonjin Cha in Seoul at firstname.lastname@example.org