IMM PE Raises 160 Billion KRW to Acquire Stake in Yongsan's 'Najin Industry'

Scenery near Najin Electronics World located in Yongsan-gu, Seoul

[Asia Economy Reporter Lim Jeong-su] The domestic private equity firm IMM PE has raised 160 billion KRW to acquire shares in Najin Industrial. Najin Industrial is a real estate leasing company that operates Najin Electronics World near Yongsan Station in Seoul. IMM plans to develop the prime land of approximately 30,000㎡ of Najin Electronics World and build a mega commercial facility.

According to the investment banking (IB) industry on the 16th, Kkampho, a special purpose company (SPC) established by IMM PE, recently borrowed 160 billion KRW from a lending consortium including Kiwoom Securities. The loan maturity is 3 years and 5 months, with principal repayment due at the end of December 2023. Kiwoom Securities issued securitized short-term bonds backed by the principal and interest of part of the loan to secure the loan funds. In this process, credit facilities such as loan receivables purchase commitments and funding supplementation agreements were also provided.

Kkampho plans to acquire the remaining shares of Najin Industrial with the raised funds. Najin Industrial built and has operated Najin Electronics World near Yongsan Station in Seoul since 1967. It is the largest domestic electronics distribution complex, including a site of about 30,000㎡ (approximately 9,000 pyeong) and six electronics shopping buildings. Until 2016, it consistently achieved sales of around 23 billion KRW on a consolidated basis, mainly from rental income.

Kkampho also issued approximately 90 billion KRW worth of Redeemable Convertible Preferred Shares (RCPS) to the second generation of Najin Industrial. Along with acquisition financing, it is understood that a total of about 250 billion KRW was raised. With these funds, about 73% of the shares were secured by June. It is reported that the remaining 27% of shares will be additionally acquired.

The second generation of Najin Industrial handed over the shares inherited after the death of the late Chairman Lee Byung-du of Najin Industrial to IMM. Initially, they planned to transfer 50.9% of the shares to Oseong Sangsa, an affiliate of the Seobu T&D Group, but after IMM offered a higher purchase price, a double contract was signed, leading to legal disputes. However, recently, with negotiations between IMM and Ojin Sangsa, IMM’s share acquisition has accelerated.

IMM plans to develop a mega commercial facility on the Najin Electronics World site. Applying the allowable floor area ratio, it is analyzed that a building approximately 10 times larger in gross floor area can be constructed. However, there are also forecasts that it will be difficult to achieve high profits considering IMM’s expensive acquisition price of Najin Sangsa shares and development costs.

An IB industry official said, "Since the COVID-19 pandemic, sales performance of commercial facilities in Seoul has been sluggish," adding, "Yongsan and its surroundings are also facing difficulties, so it is hard to be optimistic about the success of IMM’s development project."

This content was produced with the assistance of AI translation services.