Chinese private equity (PEF) AFC Korea will finally acquire STX Corp. for about 68.5 billion won (US$61.6 million). The acquisition will be made in only three months after AFC Korea was selected as the preferred bidder at the end of 2017. AFC Korea's acquisition of STX Corp. will go down in history as the first case in which Chinese capital acquires a Korean trading company.
According to the investment banking industry on April 9, recently, STX Corp creditors unanimously passed a matter to sell off an 86.3% stake, including 152,370,547 shares of common stocks and 12.71 million non-voting convertible shares that can be converted into common stocks. This means that STX Corp. will be sold for 68.5 billion won.
With reference to this matter, the creditors and AFC Korea will sign a stock purchase agreement (SPA) at the Korea Development Bank (KDB) on April 12. It is said that the representative of the Hong Kong corporation of China's Balanced Development Policy Fund, the parent fund of AFC Korea will take part in the signing ceremony.
300 billion won in agreement claims will expire by the end of this year, but both sides agreed that they would be extended for a long time. Among them, the amount of usance bills is about 260 million US dollars. 68.0billion won in non-agreement claims which are financial debtswere already repaid at the end of 2017 with STX Corp.’sfunds.
STX Corp.’s existing 120 employees were guaranteed long-term employment for five years. AFC Korea should maintain a stake of more than 50% for the right to the management of the companyfor at least three years.
The period and amount of compensations for damages from contingent liabilities were scratched off through negotiations.
AFC Korea is a three-trillion-won PEF in which Chinese state-run enterprises, banks, and the Chinese government participated as investors as theKorean base of China's balanced development policy fund. The headquarters of AFC Korea in China was established with a contribution from the Chinese government. AFC Korea ismanaging several ship funds in cooperation with major shippers in China and Evergreen Marine, Taiwan's largest container shipping company.