South Korea’s budget cosmetics company Nature Republic Co. whose name was tarnished after its founder and former chief executive Jung Woon-ho was embroiled in an illegal gambling scandal last year and a string of violence and lobbying charges this year could be put up for sale.

A number of private equity funds from home and abroad are said to be interested in the company.

According to the investment banking industry on Thursday, PEFs from home and abroad and Chinese investors have been approaching the cosmetics company to sell the 73.88 percent stake owned by Jung and the management right. Some investors already handed in letters of intent (LoI). The corporate value for the full stake is estimated at about 600 billion won ($544 million) to 900 billion won. “The investors are pressing Jung to sell the management right for the sake of both the company and himself before the management of the company further deteriorates,” said an official of the investment banking industry. Nature Republic has suffered from deteriorating earnings since he was imprisoned in October last year. The company recorded 1.8 billion won in operating loss in the first half of this year. With the CEO’s absence lasting longer, it reported a loss compared with 16.3 billion won in net profit during the same period last year. The company had planned to go public last year in order to expand its presence in the Chinese market but the plan has been postponed indefinitely. Industry observers predict that the company is unlikely to be listed within this year.

Kim Chang-ho who had been in charge of distribution management and sales was named as the new CEO in June has been trying to revitalize the company and opened stores in the U.S. and Russia.

By Kang Doo-soon and Park Eun-jin

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