Sales of Jeonju Paper to resume after corporate health improvement

Jeonju Paper Corp. logo [Courtesy of Jeonju Paper]

Jeonju Paper Corp., South Korea’s leading newsprint producer, has launched steps to resume its sales after improving corporate health.

According to multiple sources from the investment bank industry on Thursday, Morgan Stanley Private Equity (Morgan PE), the largest shareholder of Jeonju Paper, and its sales advisors Samjong KPMG and Samil PwC plan to receive preliminary bids from potential buyers on May 15. Paper companies from home and abroad, like Global Sae-A Group, and large private equity firms are known to be considering taking part in the bid.

Up for sale is the entire 58 percent stake in Jeonju Paper and Jeonju Onepower Corp. held by Morgan PE. Shinhan Alternative Investment Management Inc., which owns the remaining stake in the two firms, will likely exercise a drag-along rights upon Morgan PE’s sale of the shares.

The sales price is estimated at around 800 billion won ($614.5 million). The sellers are also considering a split sale of Jeonju Paper and Jeonju Onepower.

Jeonju Paper, founded in 1965, is Korea’s largest manufacturer of papers used for newspapers. In 2008, Morgan PE and Shinhan Alternative Investment Management acquired Jeonju Paper from Norway’s pulp and paper company Norske Skog for 810 billion won.

The company had logged operating losses between 2015 and 2017 amid a plunge in newspaper production. Jeonju Paper managed to improve performance after shifting its portfolio to corrugated cardboard business using waste papers.

Morgan PE had attempted to sell the company several times over the 15 years but it was not able to find an adequate buyer. In 2019, Sae-A Trading Co. and Hansol Group emerged as potential buyers in an open bid but the deal fell through.

As part of efforts to find a new owner, Morgan PE focused on improving corporate health and value by diversifying Jeonju Paper’s business portfolio. Jeonju Paper adopted waste paper and wood in production and set up a renewable energy power plant company Jeonju Onepower to enhance environmental, social, governance (ESG) management.