Namyang Dairy Products' Hong Won-sik Pushes for Management Rights Sale to Daewoo Winia Group

Hong Won-sik, Chairman of Namyang Dairy Products.
Photo by Yonhap News

[Asia Economy Reporter Lim Chun-han] Chairman Hong Won-sik and other major shareholders of Namyang Dairy Products are planning to sell their shares and management rights to Daeyu Winia Group. This will proceed if they win the legal dispute with the private equity firm Han & Company, which had previously attempted the sale.

On the 19th, Chairman Hong signed a memorandum of understanding for mutual cooperation with Daeyu Winia Group, which has subsidiaries including Winia Electronics, Winia Dimchae, and Daeyu ATEC, the company announced. Chairman Hong stated, "Due to a series of incidents, the company is currently in an unstable situation, and ongoing legal disputes with Han & Company have made it difficult to normalize management. Therefore, we decided to cooperate with Daeyu Winia Group to restore Namyang Dairy Products' management and enhance shareholder value."

He added that if they win the legal dispute with Han & Company and the share transfer becomes possible, they will jointly pursue the sale of Namyang Dairy Products' shares and management rights to Daeyu Winia Group. The memorandum of understanding signed this time is a 'conditional agreement' including these terms. If they lose the legal dispute and are ordered to transfer shares to Han & Company, the shares will be transferred to Han & Company. Specific contract terms such as the sale price to be paid by Daeyu Winia Group to the major shareholders of Namyang Dairy Products, the date of the share purchase agreement, and its scope have not yet been finalized.

With this agreement, Daeyu Winia Group plans to establish related plans with Namyang Dairy Products to build a compliance system for legal adherence, establish a fair and transparent trading system with dealerships, and create a transparent and reliable financial and accounting system. If necessary, experts from Daeyu Winia Group will also assist with Namyang Dairy Products' operations.

A Namyang Dairy Products official explained, "The scope of Daeyu Winia Group's work for normalizing company management is ultimately limited to preventing management gaps and restoring normal operations until Daeyu Winia Group officially acquires management rights." He added, "If the major shareholders later decide that shares must be transferred to Han & Company, Daeyu Winia Group will halt the existing plans, conduct consultations, proceed with the dismissal of Daeyu Winia Group personnel, and conclude the agreement without issues."

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