[Funding] SJ Holdings, a subsidiary of Sekogroup, refinances loans using shares of Seojin Industry as collateral

Parent Company Sekocam Provides Joint Guarantee and Accounts Receivable Collateral
Seojin Industry Accelerates IPO Preparation

[Image source=Yonhap News]

[Asia Economy Reporter Lim Jeong-su] SJ Holdings, an affiliate of SECO Group, raised refinancing funds by utilizing collateral and credit extensions provided by its affiliates. It provided shares of its subsidiary Seojin Industry, which is pursuing an initial public offering (IPO), as collateral and received support such as joint guarantees from its parent company SECOCAM.

According to the investment banking (IB) industry on the 6th, SJ Holdings raised 20 billion KRW under the lead of Korea Development Bank. The maturity is three years, with repayment divided into five installments. The raised funds were used to refinance maturing borrowings.

During the fundraising process, SJ Holdings provided 20% (1,359,158 shares) of its subsidiary Seojin Industry’s shares as collateral. In addition, the parent company SECOCAM provided a joint guarantee for SJ Holdings’ borrowings and also offered future accounts receivable from Hyundai Motor Company as collateral. The lending consortium has thus established multiple layers of repayment safety measures for SJ Holdings’ refinancing.

The existing borrowings subject to refinancing were also secured with Seojin Industry shares of the same scale, and the funds were raised under almost identical conditions. SJ Holdings has also provided over 40% of its shares as collateral to New Lake Jeil Cha.

Last year, SJ Holdings issued 5 billion KRW worth of exchangeable bonds (EB) with Seojin Industry shares as the exchange target. In this process, a condition was set for Seojin Industry’s IPO within three years. If the IPO fails, SJ Holdings agreed to repurchase the EB at its face value plus a yield of about 17%. Most of the Seojin Industry shares held by SJ Holdings were used as collateral for borrowings or for raising funds through EB issuance.

SJ Holdings also borrowed 5 billion KRW in short-term loans from its parent company SECOCAM, which provided joint guarantees for the borrowings. SECOCAM has been continuously supporting SJ Holdings’ fundraising. An IB industry official evaluated, "SJ Holdings is a holding company without its own business, unlike SECOCAM or Seojin Industry, so it is difficult to raise funds independently without collateral or affiliate support."

SJ Holdings is the largest shareholder wholly owned (100%) by its parent company SECOCAM. Bae Ki-wook, CEO of SECOCAM and son of SECO Group Chairman Bae Seok-du, holds 27.3% of SJ Holdings shares through Migovia, which he owns 100%. The governance structure is connected as Bae → Migovia → SECOCAM → SJ Holdings → Seojin Industry.

Meanwhile, Seojin Industry, which is pursuing an IPO, recently selected Shinhan Investment Corp. as the lead manager and has begun preparations for listing.

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