This article was published on May 8, 2025, at 5:20 p.m. on the ChosunBiz MoneyMove site.
The closing of a 1.6 trillion won acquisition financing by the private equity firm (PEF) Affinity Equity Partners, which is set to acquire both the top two rental car companies in the country, is imminent. Affinity is raising senior and mezzanine financing while also attracting an investment from Glenwood Credit.
According to investment banking (IB) industry sources on the 8th, Affinity is expected to complete the financing and payment for the acquisition of LOTTE Rental and SK Rent-a-Car soon. The acquisition financing consists of 1.3 trillion won in senior financing and 250 billion won in mezzanine financing, excluding the revolving credit facility (RCF). The leading underwriters for the senior financing are KDB Industrial Bank, Woori Bank, KB Kookmin Bank, Korea Investment & Securities, and Hana Securities.
KB Kookmin Bank was a co-arranger when Affinity acquired SK Rent-a-Car last year, though at that time, only a loan agreement was made, and the execution of the acquisition financing was postponed.
The interest rate on senior loans is 5.4% per annum. Through this recapitalization, Affinity has managed to lower the interest rate on senior loans to some extent. During the acquisition of SK Rent-a-Car, the financing rates set by KB Kookmin Bank and KB Securities were in the mid to high 6% range. The interest rates for the mezzanine tranche in this acquisition financing are reported to be in the high 7% range.
Following the acquisition financing, mezzanine financing is next in line. It is expected to be between 100 billion and 200 billion won in size, with interest rates estimated to be around 10% to 12%.
Glenwood Credit is reportedly reviewing the investment, but the company stated, “We cannot confirm that.” Glenwood Credit's assets under management (AUM) are approximately 1 trillion won.
Affinity acquired 100% equity in SK Rent-a-Car from SK Networks for 820 billion won in August last year and signed a stock purchase agreement (SPA) to acquire a 56.2% stake in LOTTE Rental, held by Hotel Lotte and Lotte Hotel Busan, for a total of 1.5729 trillion won in December of the same year.
Once the payment for the acquisition is complete, Affinity will have acquired both the top two rental car companies in the country. The combined market share of the number one LOTTE Rental and number two SK Rent-a-Car is about 40%.