Woongjin Coway advances as sale to MBK to proceed

Woongjin Coway, a South Korean water-purifier maker, jumped to a one-month high in Seoul stock trading after its parent and creditors agreed to stick with a plan to sell a controlling stake to MBK Partners Ltd.

Woongjin Coway rose 12 per cent to 39,800 won, the highest closing price since September 26, at the end of trading on the Korea Exchange today. Woongjin Holdings, Coway’s biggest shareholder, jumped by the daily limit of 15 per cent. The benchmark Kospi index fell 1.7 per cent.

Woongjin Holdings, its creditors and MBK yesterday agreed that Woongjin Holdings will proceed with an August contract to sell MBK a 31 per cent stake in Coway, Kim Hee Joong, a judge at the Seoul Central District Court, said by phone today. Woongjin Holdings had halted the 1.2 trillion won ($1 billion) sale after it and a unit sought bankruptcy protection last month.

“The anticipation that new management will bring changes and remove uncertainties in the business will also bring positive sentiment to Coway shares,” Lee Sang Koo, a Seoul- based analyst at Hyundai Securities wrote in a report today. The sale may be completed in early 2013, Lee said.

The details of the Coway sale will be discussed later and creditors had agreed to cooperate for a revival of Woongjin Holdings in yesterday’s hearing, according to Kim, the Seoul Central District Court judge. The court on October 11 approved court receivership for Woongjin Holdings and its Kukdong Engineering & Construction unit. Woongjin is selling Coway as part of a plan to cut debt.

Coway’s affiliates also climbed. Woongjin Energy gained 2.6 per cent and Woongjin Chemical rose 1.5 per cent.

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