M2N to sell 52% stake in Chinese automotive parts company DKCA

M2N( DK D&I Co. ), the parent company of pharmaceutical firm Sillajen Inc., announced on Tuesday that it has signed an agreement to sell its majority stake in its Chinese subsidiary DKC Autotomoitve (DKCA) to a Chinese electric vehicle (EV) parts maker based in Nanchang, Jiangxi Province.

DKCA, established in Jiangsu Province in 2003, is a manufacturer of diesel heaters for diesel filters, sensors, and solenoid valves for engine and powertrain applications.

M2N will dispose of 51.59% of its 70.59% stake in DKCA for about 5 billion won ($3.9 million) and retain the remaining 19%, becoming the second largest shareholder.

M2N's decision to sell its stake is to secure liquidity to finance expansion and build partnerships in the EV market in China.

Currently, it is reviewing several M&A deals to secure an additional growth engine and expects the deals will accelerate with the sale of its DKCA stake.

Seo Hong-min, CEO of M2N, has favored the M&A formula for expansion, including the acquisition of lender The Leadcorp, Inc. in 2008 and SillaJen last year.

Write to Jae-Young Han at jyhan@hankyung.com