Coming Out
Taihan Electric Wire Co., which agreed to with their creditors in their self-rescue program in 2012 due to excessive business diversification and financial crisis, shows signs of a revival after conducting aggressive restructuring.
The company recorded 328.3 billion won (US$283.56 million) in sales and 8.4 billion won (US$7.26 million) in operating profits in the first quarter. Its sales dropped 25 percent from the same period a year ago, while its operating profits grew as much as 460 percent.
Although Taihan Electric Wire has posted annual net losses in seven years in a row from 2009, it net a profit of 1.3 billion won (US$1.12 million) in the first quarter, returning to profit. Its debt rate also decreased from 311 percent to 280 percent.
IMM Private Equity (IMM PE) took over Taihan Electric Wire in September last year by participating in Third-Party Allotment Capital Increase through NIKE, a special purpose corporation (SPC). The 300 billion won (US$259.11 million) capital increase came in and existing creditors also carried out a debt-equity swap amounting to 80 billion won (US$69.1 million). Its debt rate, which reached 2,500 percent, plunged to some 300 percent at the end of last year, and its capital impairment ratio also dropped from some 90 percent to 20 percent. The company has made harsh restructuring efforts as well. It sold the Nambu Terminal site and former Shinhan Capital site last year. Moreover, Taihan Electric Wire plans to resolve contingent liabilities caused by the development of the Doksan Complex facilities site and Anyang plant site by the end of this year.
Another success factor is the company’s effort to establish the responsible management system by hiring a professional manager in the electric wire sector. Choi Jin-yong, who has served as CEO of Taihan Electric Wire from September 2015, is an expert entrepreneur in the field of electric wire who has extensive experience in technology development, sales, financing and management innovation.
Taihan Electric Wire won a US$52 million (60.2 billion won) deal in Saudi Arabia for an extra-high voltage cable system project earlier this year. The company is also seeking ways to take part in power grid projects in other Middle Eastern countries.