Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
K Car rallies as Hahn & Co. decides to sell stake
Used cars are parked at a dealership in Seoul in this file photo. Yonhap
By Lee Min-hyung
By Lee Min-hyung
Shares of K Car rallied as much as 16 percent, Friday, on reports that Hahn & Co., a Seoul-based private equity firm, decided to sell its controlling stake in the used car retailer.
The nation's second-largest private equity firm holds a 72 percent stake in K Car. The latter's market capitalization is around 617.9 billion won ($471.8 million) as of the closing price on Dec. 15. Other details ― including the sales price ― have yet to be confirmed, but the market estimates the firm's valuation will reach more than 500 billion won.
K Card also confirmed the report in a regulatory filing.
“The largest shareholder has picked Goldman Sachs as an advisor to discuss sales of K Car's stake and other diverse strategic options, but no concrete decisions have been made as of now,” K Car said in a statement.
Hahn & Co. acquired the used car retail business affiliate from SK back in 2018 and changed the corporate name to K Car. The company was valued at around 220 billion won. K Car has since reported solid earnings growth. The company reported sales of 742.8 billion won in 2018, with its operating profit reaching 10.6 billion won. In 2021, both figures soared to 1.90 trillion and 71.1 billion won, respectively. K Car made its stock market debut here in October 2021.
Nonetheless, it remains to be seen whether Hahn & Co. will be able to sell K Card at its proper valuation amid the current financial circumstances, which have frozen due to rate hikes and soaring exchange rates. The local mergers and acquisitions market has also remained dull in line with other asset markets.
The used car market enjoyed its heyday last year when the auto chip supply shortage across the globe delayed the production of vehicles. But the shock is recently being alleviated as is shown by the soaring sales of new automobiles here.