[Alpha Biz=(Chicago) Reporter Kim Jisun] Mid- and small-sized Korean companies jumped into the bidding for Luna XCC and The Honors CC, which Taeyoung Group is seeking to sell.

According to the investment banking (IB) industry on the 15th, Taeyoung Group and sales organizer Samil PwC closed preliminary bids for two golf courses - Luna XCC and The Honors CC - last week and received letters of intent from five to six candidates. Most of the candidates for the acquisition are known to be local mid- and small-sized enterprises.

Luna XCC is virtually frozen as an asset of Taeyoung E&C (009410), which is under workout (working to improve its corporate structure), but creditors reportedly allowed the sale of Taeyoung E&C for rapid financial improvement. Built in 2021, Luna XCC is a 24-hole public golf course with four courses of six holes each. The internal unit price is 120,000 won and sales are 3 billion won (as of 2022). Taeyoung Construction holds a 100% stake and is operated by its affiliate Blue One. The term of the responsible lease is until October 2026.

The golf course is held as collateral by a 280 billion won fund jointly created by Korea Investment & Securities Co. and Taeyoung Construction Co. in March last year. The fund was formed to finance Taeyoung Engineering & Construction's project financing (PF) loans and floating-backed securities. At that time, Korea Investment & Securities invested 200 billion won to hold Luna XCC as collateral. The maturity came next month to recover the investment through the sale.

As the fund's funds have already been spent on eight insolvent businesses and are difficult to recover, the sale price will determine the size of Korea Investment & Securities' losses. The prevailing view is that some losses are inevitable as the desired sale price of Taeyoung Construction is around 150 billion won.

Blueone The Honors CC, a golf course in the same Gyeongju area, is a 27-hole membership golf course owned by BlueOne. The internal unit price is 157,000 won and sales are 21 billion won. The sale included a 296-room condo, water park and wedding hall along with the golf course. The sale price is reportedly around 320 billion won, including 200 billion won in membership and 10 billion won in debt.

In the preliminary bidding, both candidates who wanted to acquire both Luna XCC and The Honors CC and candidates who wanted to acquire only one participated. Taeyoung Group is known to consider handing over not only golf course ownership but also operating rights for smooth sale.

Earlier, Taeyoung Group sold Yongin CC, which is recognized as the highest value among Blue One-owned golf courses, to a fund set up by Mark Asset Management along with Sangju CC.

 

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