Daeyu Plus Rehabilitation Plan Approved... "Best Effort for Early Repayment Using M&A Acquisition Funds"

One Year After Filing for Rehabilitation Proceedings
Attention on Possibility of Business Normalization and More

With the court's approval of the rehabilitation plan for Daeyu Plus, an OEM business specializing in information and communication, electric vehicle charging, and home appliances, attention is focused on the possibility of normalizing the management of Daeyu Plus, which has been undergoing court management procedures due to the management crisis of the Daeyu Winia Group.

According to the Financial Supervisory Service's electronic disclosure system on the 15th, the rehabilitation plan submitted by the joint managers of Daeyu Plus was approved at the creditors' meeting on the 12th, and on the same day, the Seoul Rehabilitation Court, Rehabilitation Division 1 (Presiding Judge Byeongwook Ahn) decided to approve the rehabilitation plan. However, until the rehabilitation process is completed, no profit distribution to shareholders will be made, and shareholders will not be allowed to exercise voting rights at shareholder meetings held without court approval.

The managers stated in the rehabilitation plan, "The most certain and swift rehabilitation method is to conclude the rehabilitation process early through mergers and acquisitions (M&A) and maximize corporate value," adding, "Since the final acquisition price submitted by the prospective acquirer exceeds the amount creditors would receive if the company were liquidated, early repayment is expected to be possible."

Previously, Daeyu Plus filed for rehabilitation proceedings in September last year and commenced the process in November of the same year. The parent company, Daeyu Winia Group, faced a management crisis due to the impact of COVID-19 and the global economic downturn, leading subsidiaries such as Winia Electronics, Winia Electronics Manufacturing, Winia, Daeyu Plus, and Winia Aid to consecutively enter court management procedures. In April, Daeyu Plus signed a conditional investment contract with the NR No.1 Rehabilitation Support Fund consortium, and since no bidders participated in the public sale process, it was converted into a formal contract.

As a result of proceeding with the rehabilitation process through M&A before approval, the investment purpose company NR No.1 Rehabilitation Support Fund agreed to acquire Daeyu Plus for 42.2 billion KRW, including 27.5 billion KRW from new stock subscriptions and 14.7 billion KRW from corporate bond purchases. DH Autoread, an automobile parts manufacturer, is the major investor in the private equity joint venture fund that owns 100% of the fund.

Accordingly, there is growing interest in the normalization of Daeyu Plus's management and the resumption of stock trading. Daeyu Plus received an 'adverse' opinion, including a disclaimer of opinion, in its review report for the first half of this year. After stock trading was suspended in September last year and then resumed, trading was again halted in February. The Korea Exchange recently suspended stock trading, citing concerns over delisting due to full capital erosion at the end of the fiscal year.

The managers expressed, "There are limitations to repaying all rehabilitation secured claims and rehabilitation bonds with the acquisition funds. We deeply regret that this plan relies on the patience and understanding of creditors and other stakeholders," but added, "We will do our utmost to rehabilitate Daeyu Plus according to the rehabilitation plan and not betray the expectations of the company, employees, the national economy, and stakeholders."