Aekyung Group is considering the sale of Aekyung Industrial, its original business. This is due to the escalating liquidity crisis across the group.
According to Aekyung Industrial on the 1st, Aekyung Group is reviewing the sale of Aekyung Industrial as part of efforts to improve its financial structure. It is reported that the subjects of sale include about 63% equity held by AK Holdings and Aekyung Asset Management.
Kim Sang-jun, CEO of Aekyung Industrial, made an official announcement to employees regarding the sale efforts at the company’s headquarters in Mapo District, Seoul, on the same day. During the meeting, Kim noted, “I have something important to share with you all,” adding, “We are currently reviewing the procedures for the sale of the company.”
He added, “Recently, sales and operating profits have not been satisfactory,” and, “We will prioritize the employment stability of our employees.” He also mentioned, “You can continue with the ongoing projects and tasks in each department as usual.”
It is reported that there were not many questions among the employees. An atmosphere of confusion was evident after the abrupt announcement of the sale.
Aekyung Group is said to be in contact with large domestic and foreign private equity funds to sell its affiliate Aekyung Industrial. Aekyung Industrial is known for its consumer goods brands “Kerasis” and “2080,” as well as the cosmetics brand “Luna.” The market capitalization of Aekyung Industrial, a listed company on the Korea Exchange, is approximately 360 billion won. The value of the equity held by AK Holdings and others is only around 220 billion won.
However, since Aekyung Industrial's stock price is undervalued compared to other cosmetics and consumer goods companies, the selling price of the major shareholder's equity is expected to be significantly higher than the market capitalization value. The sales side expects the sale price of the major shareholder's equity, including the management rights premium, to be in the range of 600 billion to 700 billion won.
An official from Aekyung Industrial stated, “We are currently reviewing various options for improving the group’s financial structure and restructuring the business portfolio. There are no finalized matters yet.”