MP Group has decided to sell 35 percent stake in its cosmetics product distributing subsidiary to a special purpose company Venus One for 44.71 billion won (US$40.94 million), according to a local news report on Dec. 7.
The group had 70.14 percent stake in its subsidiary firm MP Han Kang, but even after offloading it still remains its biggest shareholder.
|Former chairman Chung Woo-hyun|
The price is lower than a usual block deal price -- set 5.2 percent lower for contracts under 500 billion won -- due to the company’s poor financial situation, the report said.
The Korea Exchange in July suspended trading of MP Group stocks as the company’s former Chairman Jeong Woo-hyun was accused of embezzlement and breach of trust worth 15 billion won. Moreover, MP Group posted a 2.1 billion net loss last year.
On the other hand, MP Han Kang, which is currently distributing foreign cosmetics brands such as Kiss Me and Canmake here, has been doing well. It posted a net profit of 7.9 billion won last year.
The company will reportedly use some of the funds to finance its loans.
Venus One is run by IMM Investment, a Korea-based private equity firm that has previously invested in firms such as Celltrion and Able C&C.
By Song Seung-hyun (email@example.com)