[At a Crossroads: BioN②] Who Is CTM, the New Largest Shareholder?

Automotive Parts Company 'CTM'... Only 200 Million KRW Cash Held Last Year
Corporation Owned by Former Jungang Ocean CEO Jeon Byeongcheol... Notable Connection with Baion

KOSDAQ-listed company Bion is pursuing its second sale, drawing attention to the new largest shareholder. The largest shareholder of the acquirer, ‘CTM,’ is Jeon Byeong-cheol, former CEO of Jungang Ocean (now Medicox), who has a past connection with Bion’s former management through transferring Jungang Ocean shares, attracting interest.

According to the Financial Supervisory Service’s electronic disclosure, Bion’s largest shareholder, W Global No.1 Association, and Bion CEO Kim Byung-joon signed a contract on the 13th to transfer their combined 9.37% stake to CTM for 11.9 billion KRW. Additionally, Bion decided on a paid-in capital increase worth 7 billion KRW targeting CTM. CTM must raise a total of 18.9 billion KRW by the contract deadline.

CTM is a company manufacturing molds, electronic components, airbags, and seat belts for automobiles. It supplies products to automotive parts companies such as Hyundai Mobis and Autoliv. Last year, CTM recorded sales of 35.1 billion KRW and an operating profit of 1.8 billion KRW on a separate basis. Total assets amounted to 59.7 billion KRW, total liabilities 40.6 billion KRW, resulting in a debt ratio of approximately 212%.

Although sales are generated steadily, the proportion of cash holdings is relatively low. As of the end of last year, cash and cash equivalents, including short-term financial products, were about 200 million KRW. Most other current assets consist of accounts receivable and prepaid expenses. Factories located in Ansan and other areas are mostly pledged as collateral for bank loans, making immediate liquidation difficult.

Among other assets, the shares of its subsidiary Gwangjin Sanjeon could potentially be used to raise acquisition funds. CTM holds a 70% stake in Gwangjin Sanjeon. The value of this stake was 9.9 billion KRW as of the end of last year. Gwangjin Sanjeon produces cores for generators. Its main sales client is Hyundai Electric & Energy Systems. Last year, it recorded sales of 10.1 billion KRW and an operating profit of 1.1 billion KRW.

The largest shareholder of CTM is CEO Jeon Byeong-cheol, holding 35%. Including his wife’s shares, the total is 49%. Jeon Byeong-cheol is a figure who was the largest shareholder and CEO of KOSDAQ-listed Jungang Ocean (now Medicox). He managed Jungang Ocean from 2010, but as the company turned to losses from 2016, he transferred 6 million shares (26.7%) out of approximately 8.5 million shares held to Mari Investment Association in February 2018.

From that point, Jungang Ocean became chaotic. Shortly after Mari Investment Association acquired the shares, issues such as splitting and selling shares and withdrawal of association members arose, leading to a management dispute. During this process, CEO Jeon changed the purpose of holding the remaining shares from ‘management participation’ to ‘simple investment,’ then back to ‘management participation,’ and continued buying and selling shares.

Moreover, at that time, CEO Jeon developed a connection with Bion. The largest shareholder of Mari Investment Association, which received shares from CEO Jeon, is Lee Seong-min, former CEO of Bion. In December 2013, Lee acquired Bion through W Global No.1 Association. After acquisition, he served as CEO and resigned in 2016 alongside current Bion CEO Kim Byung-joon, who was co-CEO at the time. Subsequently, former CEO Lee continued M&A activities with listed companies such as YouJoint and Jungang Ocean. Last year, he attempted to acquire Selfie Global but withdrew midway. Currently, Selfie Global is under trading suspension.

Meanwhile, attempts to contact Bion and CTM for inquiries regarding this M&A case were made, but no response was received.