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[Alpha Biz=(Chicago) Reporter Paul Lee] The forced sale of 11th Street, which is suffering from a financial crisis, is expected to begin in earnest.
According to the distribution industry on the 9th, the Nile Holdings Consortium, a financial investor (FI) of 11th Street, recently selected Citi Global Market Securities and Samjeong KPMG as the organizers of the sale on 11th Street.
The Nile Holdings Consortium, which consists of the National Pension Service, Saemaul Finance Firm and H & Q Korea, a private equity fund manager, invested 500 billion won in 11th Street in 2018 to take a 18.18% stake.
However, as the operating loss continues and the e-commerce industry worsens, 11th Street has not been able to achieve an IPO within the five-year period (until September 30 last year), which is a condition for investment agreements.
Since then, SK Square, the parent company of 11th Street, has given up its "call option" event, which buys back the stake held by FI, and FI is recovering the principal through a direct sale.
Under the investment agreement, if SK Square gives up its call option, FI can exercise its "Drag-along," which allows it to sell up to its 11th Street stake (80.26%) held by SK Square to a third party at once. This sale will be carried out using the 'waterfall' method in which FI recovers funds first.
The desired sale amount is estimated at 500 billion won. The retail industry expects the sale to be completed within the first quarter.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
