"Financial Power Struggle, Tilted Victory"…Institutional 'Paeng' Ssangbangwool VS PE 'Son' KG

KB Securities "No Intention to Participate in Acquisition Financing"
KG Group's Excellent Fundraising Ability Highlights 'Possibility of Solo Run'

[Asia Economy Reporters Lee Seon-ae and Park So-yeon] As turbulence arises in securing funds for Ssangyong Motor acquisition by Ssangbangwool Group, the momentum in the 'Ssangyong Motor acquisition battle' appears to be shifting toward KG Group. The key to the Ssangyong Motor acquisition battle is 'financial capability.' Since the success of the acquisition depends on securing sufficient funds to place bids, the competition to form consortia among the two shortlisted acquisition candidates, Ssangbangwool Group and KG Group, is intensifying.

A senior official from KB Securities' Investment Banking (IB) division stated on the 13th, "From the beginning, we never expressed an intention to participate in Ssangbangwool Group's acquisition financing for Ssangyong Motor," adding, "The claim that we decided to participate in acquisition financing and then withdrew the Letter of Intent (LOI) is not true." He explained, "There was a misunderstanding that we would participate if we could invest funds at a discounted price during future market-based fundraising processes such as Ssangyong Motor's rights offering."

While Ssangbangwool Group claimed to have secured 450 billion KRW in acquisition financing from two firms, KB Securities and Eugene Investment & Securities, amid doubts about funding for the Ssangyong Motor acquisition, the financial market senses reluctance to act as a savior for Ssangbangwool Group, which is under financial regulatory monitoring. Eugene Investment & Securities' position remains unclear; although discussions have taken place, they are withholding comments on any final decision.

Nevertheless, Ssangbangwool Group's acquisition intent remains strong. They maintain that funding is possible even without KB Securities. Ssangbangwool Group is moving forward in consortium with KH Group. They stated, "Besides KB Securities and Eugene Investment & Securities, there are institutional investors under discussion, so once final agreements are reached, there will be no problem securing funds," adding, "The acquisition battle will proceed as planned without giving up, but it is still difficult to specify the exact scale of funding from Eugene Investment & Securities."

In the market, there is speculation that KG Group may run solo if Ssangbangwool Group drops out. KG Group entered the Ssangyong Motor acquisition battle by forming a consortium with financial investor (FI) Cactus Private Equity (PE). KG Chemical, which announced the submission of a preliminary acquisition letter of intent on the same day, holds cash assets amounting to 400 billion KRW. Additionally, about 1 trillion KRW can be immediately mobilized, including 500 billion KRW from the sale of KG ETS and 100 billion KRW investment from Cactus PE.

On the other hand, Ssangbangwool Group is estimated to currently have only 200 billion KRW in cash assets, which were prepared last year for the acquisition of Eastar Jet. An industry insider said, "The financial investment industry's sentiment toward Ssangbangwool Group is negative, making their dropout likely," adding, "If Eugene Investment & Securities participates as planned and other securities firms or institutions join, the two-way battle with KG Group will heat up significantly."

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