IMM invests $97 mn in Korean supplier of Boeing, Airbus

IMM Investment Corp., a major South Korean private equity firm, invested $97 million in Kencoa Aerospace Corp., a local supplier of global industry leaders such as Boeing Co., Airbus SE, Lockheed Martin Corp. and Northrop Grumman Corp.

Kencoa said on Friday it secured some 130 billion won ($97.3 million) from a special purpose company (SPC) founded by its CEO Lee Minkyu and IMM. The fund was slightly smaller than the company’s market capitalization of 172.7 billion.

The private equity firm, which manages about 7 trillion won in assets, injected the money into the SPC, which bought perpetual bonds issued by Kencoa. Lee contributed his 27.75% stake in Kencoa to the SPC, making it the Kosdaq-listed company’s largest shareholder. The deal set up the joint management and investment structure of Lee and IMM.

FOR FINANCIAL STRUCTURE, BUSINESS EXPANSION, ACQUISITION

Kencoa plans to use the fund to improve its financial structure and expand its business and customer base with goals of strengthening its position in the global aerospace industry and accelerating growth.

The company said it is set to spend 60 billion won and 40 billion won out of the total on facility investments and operations, respectively, while using the rest for other purposes such as an acquisition.

“Kencoa’s global sales power, IMM’s strong support and the market conditions, which are in full swing, will lead Kencoa’s tremendous growth together,” Lee said.

IMM invested in the company before.

The private equity firm bought Kencoa’s convertible preferred stocks for 17.5 billion in June 2019 and sold them in stages by 2022 to exit the investment for 35 billion won.

Write to Jun-Ho Cha at chacha@hankyung.com
 

Jongwoo Cheon edited this article.