IMM consortium to become the new owner of waste management firm Ecorbit

[Courtesy of Ecorbit Co.]

Ecorbit Co., South Korea’s top waste management firm, will be sold to a consortium led by IMM Private Equity and IMM Investment Corp.

According to industry sources on Monday, TY Holdings Co., the holding company of Taeyoung Group responsible for the sale, signed a final contract with the IMM consortium.

The deal involves the sale of a full stake in Ecorbit, valued at 2.07 trillion won ($1.56 billion). Including debt, the enterprise value reaches 2.7 trillion won.

This sale is part of the ongoing workout process for Taeyoung Engineering & Construction (E&C), a subsidiary of Taeyoung Group, which faced financial challenges following aggressive expansion that led to debts from its project financing projects.

Earlier this year, Taeyoung E&C’s contingent liabilities reached 2.5 trillion won.

To address these financial issues, Taeyoung E&C entered a workout process with creditor approval, which included a debt-to-equity conversion of 1 trillion won. Taeyoung Group also committed to raising 1.6 trillion won as part of its self-rescue plan.

Taeyoung Group raised 300 billion won by selling four golf courses owned by its subsidiary, BlueOne Co.

It also plans to sell the Take Hotel in Gwangmyeong, Gyeonggi Province, valued at 110 billion won, and the Yeouido office building, valued at 250 billion won.

Taeyoung Group has also started selling real estate assets, including shares and construction rights for the Sewoon District 5 redevelopment project, to GS Engineering & Construction Corp., securing over 700 billion won so far.

From the Ecorbit sale, Taeyoung Group is expected to secure an additional 400 billion to 500 billion won.

This estimate takes into account that Ecorbit’s co-owner, global private equity firm Kohlberg Kravis Roberts & Co. Inc. (KKR), will first receive 1.05 trillion won for its 50 percent stake in Ecorbit, 400 billion won lent to Taeyoung Group, and about 100 billion won in interest over two years.

After taxes, around 500 billion won will remain. Once the sale of Ecorbit is completed, Taeyoung Group will have secured a significant portion of its 1.6 trillion won self-rescue target.

The sale of Ecorbit was highly competitive, with major private equity funds making bids, including the IMM consortium, Carlyle Group Inc., Keppel Infrastructure Trust, and Gaw Capital Partners.