Hanwha chief ’s brother-in-law behind SillaJen, Mason deals
Moneylender Leadcorp grabs attention in local M&A market
Leadcorp Chairman Seo Hongmin, the younger brother of Hanwha Group Chairman Kim Seungyoun’s wife, Seo Young-min, has been the focus of attention recently, as the nation’s third-largest private money lender he owns has been cited as the cash supplier for buyers of two troubled Kosdaq-listed companies — SillaJen and Mason Capital.
According to SillaJen, Wednesday, Kosdaq-listed steel product manufacturer M2N was chosen as the preferred negotiator to take over the biotech company, after presentations given earlier this week by three bidders — M2N, BDI and Huvexel.
The largest shareholder of M2N is DK Marine, which is owned by the Leadcorp chairman. The Hanwha chairman’s wife also invested 1 billion won ($894,000) in M2N last year. The company has therefore been regarded as the strongest candidate to acquire SillaJen due to its ability to raise a significant amount of cash through its affiliates.
SillaJen described M2N as a company that can “maximize future value and represent shareholders.” M2N changed its name from DK D&I last year and entered the biotech market with its acquisition of U.S.-based GFB.
The minority shareholders of SillaJen are now hoping to complete the acquisition deal and resume trading the firm’s stocks, which has been halted since May last year, after former CEO Moon Eunsang was prosecuted on charges of embezzlement and malpractice.
The Korea Exchange (KRX) has demanded SillaJen to reform its governance structure by attracting new investors, to avoid being delisted.
A day before the announcement of the SillaJen deal, Leadcorp caught the attention of market participants, as Cactus Private Equity, a local private equity firm (PEF), decided to become the largest shareholder of Mason Capital, a medium-sized credit financial firm, by acquiring a 34 percent stake for 26 billion won, using part of a 38 billion won investment from Leadcorp.
Leadcorp made the investment last month helping it become the de facto owner of Mason Capital, although the PEF will be in charge of managing it.
Mason Capital has been in a dispute with its minority shareholders who have called on management to take responsibility for snowballing losses. The KRX designated Mason Capital as a firm suffering from administrative issues last year because it suffered losses for four consecutive years.
Both Leadcorp and Mason Capital are expected to move forward with steps to diversify their income sources once the acquisition deal is done.
In particular, the deal is viewed as part of Leadcorp’s efforts to advance into the traditional financial industry as OK and Welcome financial groups did, amid deteriorating profitability in the private moneylending market and the government’s decision to lower the maximum legal interest rate to 20 percent from 24 percent starting July.
The company has continued to seek new businesses, and last year it acquired rental platform provider BS Rental and used-car auction platform Car Auction. The Leadcorp chairman said at that time that he would overcome the COVID-19 crisis by reforming his company with his youth and creativity. On a related note, Leadcorp is also said to be considering taking over a savings bank to become a financial group.