Hanjin KAL, Dunamu, and Innowireless Exit in March This Year
Still Holding LIG Nex1, BTL Advanced Materials, etc.
Interest in Environment, Secondary Batteries, Robotics, and AI Companies
Committed to Corporate Governance Improvement as a 'Lifelong Mission'
Kang Sung-boo, CEO of KCGI (center), is answering questions at a press conference held by the shareholder alliance for the normalization of Hanjin Group at the Glad Hotel in Yeouido, Yeongdeungpo-gu, Seoul on the 20th. Photo by Kim Hyun-min kimhyun81@
[Asia Economy Reporter Park Soyeon] Kang Sung-bu, CEO of KCGI, expressed confidence in the acquisition of Meritz Asset Management.
On the 21st, Kang Sung-bu met with Asia Economy at the Conrad Hotel in Yeouido and said, "Due to the non-disclosure agreement (NDA) with Meritz, it is difficult to mention detailed information, but it is highly likely that (KCGI) will acquire Meritz Asset Management." At the same time, he indirectly explained the estimated corporate value by saying, "It is difficult to specify the exact corporate value of Meritz Asset Management, but its equity capital is about 32 billion KRW, and asset management companies have been traded at a PBR (price-to-book ratio) of 1.5 to 2 times."
Meritz Financial Group is currently conducting the sale of Meritz Asset Management with NH Investment & Securities selected as the lead manager. Meritz Asset Management recorded operating revenue of 10.5 billion KRW up to the third quarter this year.
Regarding the investment sectors they are recently interested in, he said, "We are closely watching deals related to environmental companies and secondary battery material companies," adding, "We are also paying attention to companies that could become future growth engines such as robotics and artificial intelligence (AI)." He also expressed a willingness to invest overseas, saying, "We need to invest globally rather than just in domestic companies."
KCGI began recovering investments in three out of five companies in its portfolio from early this year, anticipating an economic downturn. In March this year, they sold their stake in Hanjin KAL to Hoban Construction, earning about twice the profit, and also exited from Dunamu and Inno Wireless. Kang said, "We sold Hanjin KAL for more than 700 billion KRW," adding, "We sold at 60,000 KRW per share, and looking back, it seems we sold at a good price." The closing price of Hanjin KAL on the 21st was 40,300 KRW. Defense industry and secondary battery-related companies remain in the portfolio. He said, "We have invested 100 billion KRW each in LIG Nex1 and its holding company (LIG) and still hold them, and the secondary battery pouch company BTL Advanced Materials also remains in the portfolio."
Kang predicted the stock market bottom to be in the first quarter of next year. He forecasted, "We have to endure the pain of deleveraging for a while. Since the stock market reflects the economy in advance, I think it will hit bottom in the first quarter of next year."
Kang Sung-bu said he will continue to dedicate his life’s work to improving corporate governance. He emphasized, "I have focused on corporate governance improvement for 15 years and will make it my life mission until the end, just like the company name KCGI." KCGI is an activist private equity fund named after the English initials of 'Korea Corporate Governance Improvement.'
Meanwhile, KCGI, together with the Korea Corporate Governance Forum, started selecting the 'Korea Corporate Governance Awards' for the first time this year. They also pledged a donation of 1 billion KRW in prize money. At the first award ceremony on the 21st, they selected the late Dr. Yoo Il-han, founder of Yuhan Corporation, as a model of a 'good entrepreneur.' Kang said, "Improving corporate governance is not just about wielding a whip. We also need to give carrots to companies that do well and offer praise and applause." He added, "I will never pass my company on to my children, and I will donate half of my personal wealth back to society."
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