Woongjin, investors at odds over sale

Woongjin Holdings is at odds with MBK Partners, a leading Korean private equity fund, over details of the sale of top local water purifier maker Woongjin Coway, sources said yesterday.

The move comes a day after the two sides tentatively agreed to complete the sale of Woongjin Coway to MBK Partners by January of next year.

In August, Woongjin Holdings, the parent company of Woongjin Coway, signed a deal with MBK Partners to sell its 30.9 percent stake in the purifier unit to the private equity fund for 1.2 trillion won ($1 billion), to help improve its financial health.

Under the plan, MBK Partners is scheduled to pay 360 billion won, or 30 percent of the deal, to Woongjin Holdings this year before paying the remainder in January.

On Thursday, the two sides were trying to work out differences on which side will own Woongjin Coway’s annual dividends for the 30.9 percent stake.

Woongjin Holdings insists that it should receive Woongjin Coway’s payout worth up to about 30 billion won as it will own the stake until January when the sale of the purifier unit will be completed.

Meanwhile, MBK Partners said the issue should be decided in Woongjin Coway’s annual general meeting of shareholders scheduled on Nov. 30.

The dispute comes after Woongjin Holdings was placed under court receivership due to financial difficulty.

The two sides were also miles apart over representations and warranties on the deal that will set rules on whether the buyer or seller will cover any possible legal and financial losses that could be found after the deal is finalized.

MBK Partners said Woongjin Holdings should guarantee any changes after due diligence, a demand rejected by Woongjin.

The two law firms that represent Woongjin and MBK Partners were trying to reconcile the differences.

If the issues are resolved, Woongjin Holdings and MBK Partners plan to submit a request to the Seoul Central District Court to approve the sale of Woongjin Coway. Yonhap