Sae-A's owner family hit by scrapped IPO of Tailim Paper

Global Sae-A Group Chairman Kim Woong-ki / Courtesy of Global Sae-A Group

By Park Jae-hyuk

Tailim Paper decided to drop its plan to be listed on the benchmark KOSPI market, Wednesday, after the nation's leading corrugated cardboard manufacturer failed to attract institutional investors in a two-day demand forecasting session held earlier this week.

Global Sae-A Group, the largest shareholder of Sae-A Trading ― which wholly owns Tailim Paper ― is said to have refused to cut Tailim Paper's valuation below the range of 615.9 billion won ($483 million) to 713.1 billion won as it initially proposed, given that Sae-A Trading had acquired Tailim Paper and its subsidiary, Tailim Packaging, for 730 billion won from IMM Private Equity in 2019.

“We will consider resuming attempts for an initial public offering (IPO), depending on the market conditions,” a Tailim Paper official said.

However, it is unclear whether Tailim Paper will be able to go public in the near future, considering the fact that Hyundai Engineering, Daemyoung Energy, Voronoi and SK shieldus have also scrapped their IPO plans this year, amid weakening investor sentiment.

Industry officials expect Tailim Paper's latest decision to also cause a setback in Global Sae-A Group Chairman Kim Woong-ki's plan to hand over control of the group to his daughter.

Before the cancellation of the IPO, Sae-A Trading sought to sell 40 percent of Tailim Paper's 8.1 million stocks to go public.

Industry officials considered the plan to be intended for the group to retrieve money it invested for the Tailim Paper acquisition, as well as for the chairman's daughter to secure cash to pay inheritance taxes.

The daughter has been increasing her influence over the group's key affiliate, Sae-A Trading, since Sae-A Eins, over which she had control, merged with Sae-A Trading in 2018.

She had been expected to enjoy handsome dividends from Tailim Paper after its IPO.