According to industry sources on January 15, Woongjin Group’s rehabilitation proceeding will end early next month, helped by early debt repayments and management normalization. So far, the group has been steadily preparing for its comeback by strengthening the competitiveness of its education businesses, which is a basis for its growth, and strengthening core businesses such as IT services.
The amount of debt repayments through the sale of Woongjin Coway and Woongjin Chemical equals 1.236 trillion won (US$1.161 billion), which accounts for more than 80% of the total of 1.5109 trillion won (US$1.4210 billion). The remaining debt, worth 270 billion won (US$253 million), is expected to be amortized over the next 10 years, in line with the corporate rehabilitation plan. The acceleration of debt repayment is mainly attributable to speedy sales of the group’s major units.
Woongjin Coway, which was offered for sale even before the group went into court receivership, was sold to MBK Partners for 1.1914 trillion won (US$1.1205 billion) in January 2013. Woongjin Foods and Woongjin Chemical were also sold smoothly, with a dramatic increase in the purchase price. At first, the estimated price for Woongjin Foods was 50 billion won (US$47 million), but it was actually sold at 115 billion won (US$108 million) thanks to excellent performance and growth. Woongjin Chemical also saw its price jump from 200 billion won (US$188 million) to 430 billion won (US$404 million) owing to competition between large companies for the acquisition.
With Woongjin Group filing for a rehabilitation proceeding in September 2012 on account of the excessive business expansion and financial distress of Kukdong E&C, the salaried man myth of Woongjin Group Chairman Yoon Seok-keum lost its significance. The group itself was in danger of bankruptcy. However, the Chairman succeeded in the preparation of the group’s comeback by rapid sales of some of its main subsidiaries, even though the group size was reduced as a result.
The business succession from the first to the second generation has been practically finalized. In fact, the Chairman sold his 100% stake in Woongjin Holdings to his two sons in December 2013.