IMM PE looks to exit from Taihan Electric Wire

Taihan Electric Wire's production facility in Dangjin, South Chungcheong Province (Taihan Electric Wire)

South Korea’s buyout firm IMM Private Equity is looking for a buyer for Taihan Electric Wire starting November, five years after it invested 300 billion won ($261.7 million) in the then-debt-saddled company for a controlling stake, according to sources Friday.

Shares of Taihan, the nation’s No. 2 power transmission wire maker, rose sharply on the Korea Exchange’s main bourse Kospi on Friday. At 12:30 p.m., Taihan shares were trading 9.8 percent higher than the previous day’s close.

IMM PE, Korea’s third-largest private equity firm with $4.9 billion assets under management, has selected Credit Suisse’s Seoul branch to manage the deal. Law firm Shin & Kim and accounting firm Ernst & Young Han Young will advise on the deal.

This comes as IMM PE has so far divested a 15 percent stake in Taihan since 2018 to cash out 135.2 billion won, redeeming nearly half of its initial investment.

IMM PE currently controls a 54.94 percent stake in Taihan through a special purpose company, Nike, along with creditors including Hana Bank.

IMM PE bought Taihan when the cable maker was suffering a capital impairment as its debt approached 2 trillion won and its electric cable businesses were making losses. The company, founded in 1955, was also under review by the KRX for violating accounting rules.

After the buyout by IMM PE, however, Taihan managed to keep the liabilities below 1 trillion won. In the meantime, based on its signature 500-kV ultrahigh voltage underground cables, Taihan has sought to expand its global presence in the Middle East, Europe and the United States. The company has also made use of production in Vietnam, South Africa and Saudi Arabia.

In 2019, Taihan logged a 12.6 billion won net loss.

The move comes as IMM PE searches for exit opportunities to take profits on its portfolio companies. Along with Taihan, also up for sale is online select shop platform operator W Concept Korea, which IMM PE bought in 2017.

In September, IMM PE agreed to sell a 93.8 percent stake in domestic coffeehouse chain Hollys Coffee to chemical-to-financial business group KG Group for 145 billion won.

By Son Ji-hyoung (consnow@heraldcorp.com)