Local Restructuring Consulting Market
Global restructuring consulting firms and investment companies are rushing into the local restructuring market, which has already reached 40 trillion won (US$37.9 billion) in size owing to major conglomerates such as Woongjin, STX, and Tong Yang, and the privatization of public enterprises. AlixPartners and Alvarez & Marsal (A&M) are doing business in the Korean market and FTI Consulting is about to enter Asian markets, including Korea, as well. These are the world’s three largest restructuring consulting firms.
AlixPartners landed in the Korean market in July last year and has been engaged in restructuring consulting for three to four local companies since then. A&M opened an office here last month to provide similar advisory services for a stainless steel manufacturer.
Investment banks specialized in corporate restructuring are knocking on the door of the market one after another, too. Lazard, one of the big three in the sector, set up its Korean office in June this year. More recently, Houlihan Lokey is preparing to enter the market in partnership with an investment firms in the country. Houlihan Lokey is the global number one IB specialized in corporate restructuring and a fully owned subsidiary of Orix.
They are considering that the Korean market is an early-stage blue ocean, predicting that the restructuring of the small and mid-size enterprises associated with them will speed up along with that of their larger business partners. The market size is likely to go beyond the expectations of many with the conglomerates and public enterprises in question alone worth 40 trillion won (US$37.9 billion). AlixPartners Vice Chairman Al Koch published a report on the Korean market in March this year, saying that 17% of the companies listed on the Korean stock exchange are exposed to bankruptcy risks, and the percentage is as high as 44% and 35% in the shipping and construction industries, respectively.