Winia cancels acquisition deal with Seoul Private Equity

Winia Co., a South Korean home appliance manufacturer under court-led restructuring, has terminated its conditional acquisition agreement with Seoul Private Equity. 

In a regulatory filing on Friday, Winia cited the non-payment of the second tranche of the deposit by the private equity firm as the reason for the deal's collapse.

Seoul PE, founded in 2023, had proposed acquiring Winia through a stalking-horse bidding process. It valued the company, under court receivership since late last year, at 87 billion won ($60 million).

Last month, the private equity house deposited 4.35 billion won, or 5% of the proposed acquisition price, as an initial payment.

The stalking-horse process allows a troubled company to secure a preliminary deal with a selected bidder — known as the stalking-horse bidder — before inviting other bidders.

Unless higher bids emerge, the stalking-horse bidder finalizes the acquisition under the pre-agreed terms.

OPEN TO RESUMING NEGOTIATIONS

Seoul PE let the second payment deadline lapse on March 6 after its proposed acquisition terms failed to secure majority support from Winia's creditors.

It had offered to pay 8% of unpaid wages and supplier debts in cash, with the remainder to be converted into equity. However, some 30% of Winia creditors opposed the proposal.

Seoul PE, specializing in distressed assets, said it will resume negotiations with Winia if its proposal gains creditor approval.

If Winia's rehabilitation plan, including finding a new owner, fails to receive court approval by April 23, it could face liquidation. 

In the event of bankruptcy, Seoul PE said it will seek to recover its initial deposit through legal procedures.

Write to Da Eun Choi at max@hankyung.com
 


Yeonhee Kim edited this article.