MBK Partners L.P., South Korea-based private equity fund and the largest shareholder of the country’s leading consumer health appliance rental and service company Coway Co., has succeeded in refinancing 1.35 trillion won ($1.18 billion) loans, a move that is expected to help the PEF fully recoup its initial buyout investment in Coway.

According to multiple sources from the investment bank industry on Wednesday, MBK Partners has successfully refinanced 1.35 trillion won worth debts including 1.05 trillion won worth of senior loans with a 4.5 percent yield, 200 billion won worth of mezzanine loans with a 6.4 percent yield, and 100 billion won worth of limit loans for operating costs. Mirae Asset Daewoo Securities Co. that has arranged the refinancing will also chip in 240 billion won, consisting of 190 billion won in senior loans and 50 billion won in mezzanine loans.

Other institutional investors from the local banking and insurance sectors will also take part in the latest refinancing scheme, with Korea Development Bank lending 190 billion won loans, Hyundai Marine & Fire Insurance Co. 80 billion won, and Korea Scientists & Engineers Mutual-aid Association 20 billion won.

Debts backed by MBK Partners’ 31.52 percent stake in Coway has attracted many investors on growing expectations for the country’s leading air and water purifier maker’s business prospects amid worsening air quality of the nation due to fine dust. The stake MBK Partners holds in Coway was valued at 2.3 trillion won based on the company’s closing stock price of 98,100 won on Wednesday.

The successful refinancing is expected help MBK Partners repay existing acquisition loans and redeemable convertible preference share (RCPS) investment funds. The PEF has also opted to recollect its investment in Coway by receiving dividends from Coway Holdings, a special purpose company set up to take over the health appliance rental service company.

MBK Partners will be able to recollect all the original buyout investment of 420 billion won, allowing it to gain profit including capital gains upon resale of Coway.

By Kang Doo-soon and Han Woo-ram

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]