Mook Co., a South Korean medium-sized manufacturer of shoes, textiles, and luxury goods that is currently under court receivership, is expected to be out in the market for sale.

According to multiple sources from the investment bank industry on Wednesday, the Seoul Central District Court and EY Han Young, a leading accounting firm and deal advisor of Mook, have announced they will issue new shares to sell the shoemaker. They plan to receive letter of intents from potential buyers until 19 August and final tenders in the end of September after two weeks of due diligence.

Mook, which was established in 1991, is a retailer, wholesaler, and manufacturer of shoes, handbags, apparels, and miscellaneous goods in Korea. The company made its name when it tapped into the Hong Kong market in 1996 by opening stores and raised 70 billion won ($62.7 million) in sales. After 2000, however, with intensified competition in the local shoemaking industry, Mook’s sales and profitability began to deteriorate. Last year, the company logged an operating loss of 1.1 billion won on sales of 43.2 billion won mainly due to the sluggish domestic economy amid the outbreak of the Middle East Respiratory Syndrome (MERS).

Early this year, Mook had tried to sell its management control in the form of private sale as part of efforts to fight against liquidity woes. Sale negotiations, however, broke down, leading Mook to file for court receivership in April.

Industry observers expect that the sale of Mook would attract many potential bidders, citing the company’s relatively solid earnings for the last three years, brand awareness, and business network. Mook posted an operating loss for only one year in 2015 due to the domestic slowdown amid the MERS outbreak. In 2014, Mook generated 1.3 billion won in operating income on sales of 43.6 billion won while in 2013, it raised 1.3 billion won on sales of 42.7 billion won.

Observers also note that compared to other companies that are under court receivership whose assets are worth less than their face value, Mook’s debt ratio is relatively lower at 92.3 percent. Mook has 29.7 billion won worth of assets as to 27.4 billion won worth of debts.

By Yoo Tae-yang

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