UBS, Citigroup to handle sale of KKR’s JV with Korean builder

EQT, BlackRock, Macquarie and Global Infrastructure Partners are touted among potential buyers of Ecorbit, valued up to $2.3 bn

Taeyoung Engineering & Construction headquarters in Seoul (Courtesy of News1)

Jun-Ho Cha 1

2024-01-30 17:52:02 chacha@hankyung.com

Corporate restructuring

UBS Group AG and Citigroup Global Markets Inc. are set to manage the sale of a joint venture between global private equity giant KKR Co. Inc. and ailing South Korean medium-sized conglomerate Taeyoung Group, a key step to normalize its debt-ridden construction unit.

KKR and Taeyoung Group, which owns 50% in Ecorbit Co., have selected UBS and Citigroup as lead managers to sell the JV, said investment banking industry sources in Seoul on Tuesday.

KPMG Samjong Accounting Corp., the South Korean member firm of KPMG International Ltd., is the accounting adviser for the deal, while Kim & Chang, the country’s top law firm, is the legal advisor, according to the sources.

Taeyoung Group pledged to use the proceeds from the sale of Ecorbit to support Taeyoung Engineering & Construction Co., South Korea’s first builder to face debt restructuring in a decade.

The sellers aim to start the official sale process in March to conclude the deal in the second half of this year.

Global major private equity firms specializing in the infrastructure sectors such as EQT AB, BlackRock Inc., Macquarie Capital Private Equity and Global Infrastructure Partners (GIP) were touted among potential buyers, industry sources in Seoul said.

Ecorbit, South Korea’s largest waste and sewage management company, was founded in 2021.

Its enterprise value has been estimated as high as 3 trillion won ($2.3 billion), more than 10 times its earnings before interest, tax, depreciation and amortization of 250 billion won in 2022.

Write to Jun-Ho Cha at chacha@hankyung.com

Jongwoo Cheon edited this article.