이 기사는 2020년 06월 15일 08:00 thebell 에 표출된 기사입니다.

North Asia-focused private equity firm MBK Partners is working on a 1.4 trillion-won ($1.16 billion) recapitalization of Doosan Machine Tools, sources said on June 11.

The South Korean machine tool manufacturer and its holding company DMT Holdings will borrow 700 billion won each, including revolving credit facilities, according to sources.

Doosan Machine Tools plans to use 450 billion won of the proceeds from the recapitalization to repay existing indebtedness, while 200 billion won will be distributed back to the holding company. Of the proceeds received by DMT Holdings through recapitalization, 310 billion won will be used to retire existing debt.

MBK Partners was also paid from DMT Holdings a dividend of 70 billion won in March. The recapitalization, combined with the latest dividend, will allow the firm to earn roughly 540 billion won from DMT Holdings.

MBK Partners established DMT Holdings in 2016 to acquire Doosan Infracore’s machine tool operation, which is now known as Doosan Machine Tools, for about 1.2 trillion won. The firm made a 440 billion-won equity investment in DMT Holdings through its third buyout fund while raising about 660 billion won in loans.

In 2018 MBK Partners recapitalized Doosan Machine Tools to increase indebtedness from 660 billion won to 1.15 trillion won. After the transaction MBK Partners took around 470 billion won from DMT Holdings, making a profitable partial exit.

Because MBK Partners already earned more than its equity investment, the 540 billion-won net proceeds from the second recapitalization – less repayment of existing debt – will likely be entirely recognized as the firm’s excess earnings. Dividends annually paid from Doosan Machine Tools also would appear to have contributed to raising investment returns.

MBK Partners is known for employing various partial exit strategies prior to a full exit.

For instance, the firm made partial exits from Coway through three rounds of recapitalization and two block sales in the course of five years of its investment in the water purifier rental company before making a full exit by selling the remaining stake to Woongjin Group last year. MBK Partners’ investment in Coway recorded an internal rate of return of 26 percent and a multiple of equity of 3.3 times, according to the firm.

MBK Partners’ full exit from Doosan Machine Tools is expected to be delayed as the firm halted a sale process earlier this year due to obstacles like the financial fallout of Covid-19.

(Reporting by Hee-yeon Han)