Six contenders have handed in bid for Hyundai Cement Co. which could allow creditors to get the top price-end of around 600 billion won ($525 million) for their stake.

According to the investment banking industry on Tuesday, Ssangyong Cement Industrial Co., Halla Cement Corp., IMM Private Equity, LK Investment Partners, Hyundai Sungwoo Holdings Co. and PineStreet Group have submitted terms to acquire a 84.56 percent stake in Hyundai Cement offered by creditors and sales advisors Korea Development Bank, Samil PricewaterhouseCoopers, and Hana Financial Investment Co. United Asset Management Company (UAMCO), a non-performing asset investment firm co-invested by six banks in Korea, decided to pull out of the race.

The creditors plan to select a preferred bidder around early next week at the latest. Industry competitors Ssangyong Cement Industrial and Halla Cement are expected to lead the buyout, according to market experts. Owned by private equity funds, the two cement makers have production bases located at coastal regions and would benefit most if any of the two takes over Hyundai Cement with its manufacturing site at the inland of the country.

Seoul-based PEF Hahn & Co. has expanded its presence in the local cement industry after acquiring multiple cement makers including Daehan Cement Co., Ssangyong Cement, Hannam Cement Co. and Posfine Co. Glenwood Private Equity and Hong Kong-based PEF Baring Private Equity Asia, which jointly bought out Lafarge Halla Cement (previously Halla Cement) in March 2015, have also expressed keen interest in taking over Hyundai Cement.

Hyundai Cement stands as Korea’s sixth largest cement manufacturer with roughly a 10 percent market share. But the fate of the cement maker will likely be a game changer for the Korean cement industry as the local market is tightly controlled by No. 1 and 2 - Ssangyong Cement Industrial and Hanil Cement Co.

If it wins the bid, Ssangyong Cement Industrial with a 21 percent market share would be able to solidify its top position and command 30 percent in market share. Hanil Cement commanding 10 percent would rank third in the local market.

Hyundai Sungwoo Holdings Co., an auto components manufacturer, is also regarded as strong contender in the bid. Led by Chung Mong-yong, younger brother of Chung Mong-sun who was former chairman of Hyundai Cement, Hyundai Sungwoo Holdings is seeking to regain control of once the same family-owned company. IMM PE has also shown a strong will to take over the company by forming its no. 3 blind fund worth 1.3 trillion won.

Market experts expect that the sale price could reach 500 billion to 600 billion won including management premiums.

Shares of Hyundai Cement closed unchanged at 29,500 won in Seoul trading on Wednesday.

By Kang Doo-soon and Hong Jang-won

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