IPOs of Hahn & Co.-owned firms crucial to NH Investment

NH Investment & Securities headquarters in Seoul / Courtesy of NH Investment & Securities

By Park Jae-hyuk

Attention is focusing in on whether or not NH Investment & Securities will successfully handle the planned initial public offerings (IPOs) of firms owned by Hahn & Company.

The brokerage arm of NongHyup Financial Group is serving as an underwriter for the listing of K Car and H-Line Shipping, both of which are Hahn & Company’s portfolio firms. Goldman Sachs is also engaging in the K Car deal, while Mirae Asset Securities is involved in the H-Line Shipping deal.

K Car, the nation’s leading used car dealership acquired by Hahn & Company in 2018, asked the Korea Exchange earlier this month for a preliminary review of its IPO plan. H-Line Shipping, which has been owned by the private equity firm (PEF) since 2014, seeks to go public within this year.

It is unclear at this moment whether their plans can succeed, given that an IPO has been regarded as the toughest exit option for domestic PEFs.

PEFs have tended to prefer sales of their portfolio companies over IPOs, because the former enables them to make divestments in a short period of time. Investors have also remained reluctant to bet on PEF-owned listed companies to avoid their money being used to profit PEFs, instead of for long-term growth of the companies in which they invested.

Anchor Equity Partners, for example, dropped its plan recently to list A Twosome Place, amid doubts over the coffeehouse chain’s valuation. NH Investment was one of three securities firms that had participated in the bid to be selected as an underwriter, along with KB Securities and Samsung Securities.

Hahn & Company also attempted a few years ago to list N Search Marketing, Daehan Cement and H-Line Shipping, after selecting NH Investment as an underwriter for the deals. However, it decided eventually to postpone or withdraw the plans.

Although MBK Partners listed Orange Life Insurance in 2017 and VIG Partners listed Samyang Optics the same year, it has been difficult to find other PEF-owned companies that have gone public in the Korean capital market.

NH Investment will therefore be able to have a better track record, if it completes its tall tasks successfully. The securities firm will also be able to strengthen ties with Hahn & Company.