Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Macquarie PE aims to recoup LG CNS stake investment
Macquarie Group headquarters in Sydney, Australia / Yonhap
By Anna J. Park
By Anna J. Park
Macquarie Korea Opportunities Fund, a closed private equity fund (PEF), aims to retrieve parts of its capital invested into LG CNS through recapitalization, after two years of holding 35 percent of the shares in LG Group's IT solutions affiliate.
According to the investment banking industry earlier this week, the private equity firm recently sent out a request for proposal (RFP) soliciting bids from major banks and securities firms regarding the recap of its 35 percent stake.
Macquarie Korea acquired the stake from LG Corporation in 2020 at a price of 950 billion won ($787 million). Over 63 percent of the money, or some 600 billion won, was raised by acquisition financing at an interest rate of around 3 percent.
Through the recapitalization ― a financing technique of restructuring a company's debt and equity mixture to either obtain new capital or stabilize the company's capital structure ― the PEF plans to retrieve most of the 600 billion won.
LG CNS' positive year-on-year growth backed up the PEF's ambitious recap idea. The firm's cumulative revenue of 2.6 trillion won logged during the first three quarters of last year showed a 22 percent increase from the previous year. Its operating profit saw a 66 percent jump year-on-year to record 200 billion won.
In mid-2019, LG Corporation decided to sell off part of its 85 percent stake in LG CNS, in a move to preemptively respond to a revision of the Fair Trade Act regulating excessive business contracts within a conglomerate structure.