Ssangyong Cement Industry Co.’s lucrative subsidiary Ssangyong Materials Corp. is expected to find a new owner this year, with expectations that its potential sale would fetch up to 90 billion won ($80 million).

According to the investment banking industry on Tuesday, Samil PwC, its financial advisor, aims to receive letters of intent (LOI) from interested bidders until late this month and allow probable buyers to conduct due diligence in November. If the plan goes as expected, the industrial materials company will likely find a new owner within this year.

The 52.17 percent stake in Ssangyong Materials owned by Ssangyong Cement Industry is put up for sale, and considering its latest share prices, the potential sale price would reach up to 90 billion won. The company’s share was traded at 3,235 won as of 1:59 p.m. on Wednesday, up 0.8 percent, or 25 won, from a previous session.

Industry observers expect competition to buy Ssangyong Materials would heat up as it is one of rare small- and medium-sized firms that have steadily posted solid earnings, said an unnamed official from the local IB industry. The company supplies its core product magnets used in motors to major global auto parts companies including Robert Bosch and Valeo Service. As of last year, it commanded 11 percent in the global motor magnet market and up to 40 percent in the local market. Its share in the domestic ceramics market also exceeded 30 percent.

Ssangyong Materials has earned an operating profit of more than 6 billion won on average and sales of over 100 billion won annually. Last year, it posted 6.2 billion won in operating profit and 106.6 billion won in sales on a consolidated basis.

Its parent company Ssangyong Cement Industry has been reviewing sales of its subsidiaries including Ssangyong Materials to focus more on its core cement business since it was acquired by private equity investment firm Hahn & Company last year.

Ssangyong Cement Industry shares were up 1.7 percent, or 300 won, to 17,700 won from the previous day.

By Chun Gyung-woon

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