[Exclusive] UAMCO Suddenly Moves to Replace STX Engine CEO Lee Sang-soo—Why? [fnMarketWatch]

[Financial News] United Asset Management Company (UAMCO), the largest shareholder of STX Engine, is suddenly moving to replace Lee Sang-soo, the company’s CEO and president. The company is likely to hold a board meeting this month and a shareholders’ meeting between mid-October and late October. The decision comes just six months after Lee was reappointed at the annual shareholders’ meeting in March. Market observers interpret the move as preparatory work for launching a sale process in earnest.
According to investment banking industry sources on the 8th, UAMCO is reportedly pursuing the replacement at the fund’s highest management level. Born in September 1962, Lee rose to CEO and president of STX Engine in 2023 after serving as head of the high-speed engine design team, executive vice president overseeing design, and head of the special-purpose division. He is regarded as a defense-engine expert who led the localization of diesel engines for the K9 Thunder self-propelled howitzer.
STX Engine reappointed Lee after his term expired in March and decided to maintain a structure in which the CEO also serves as chairman of the board. At the time, STX Engine explained, "The CEO, who has a comprehensive understanding of the company’s operations, has been appointed chairman of the board to improve the efficiency of board operations and decision-making. Therefore, the CEO and chairman positions are not operated separately."
The fund’s maturity is being cited as a possible reason for the replacement. UAMCO holds a 61.68% stake in STX Engine through UAMCO Corporate Rebound Eighth Corporate Financial Stability Private Equity Investment Partnership, a restructuring private equity fund. UAMCO has pursued a turnaround since acquiring management control in 2018, but with the fund’s maturity approaching around 2027, preparations for an exit have become unavoidable. This structure makes it difficult to avoid directing management resources toward improving corporate value and selling the company rather than pursuing long-term governance reforms.
STX Engine’s underlying earnings strength is not poor. In the second quarter of this year, STX Engine posted 213 billion won in revenue and 25 billion won in operating profit, representing an operating margin of 11.7%. Korea Investment & Securities estimates that STX Engine’s operating profit will rise to 92 billion won this year, 114 billion won in 2027, and 122 billion won in 2028.
Amid strong conditions in shipbuilding and land-based power generation, STX Engine is reinvesting profits from its civilian-engine business into the development and localization of defense engines for systems such as the K9 Thunder and K239 Chunmoo. Its value is rising as orders for marine medium-speed engines accumulate, demand for emergency power-generation engines increases, and defense demand from Europe and the Middle East adds further momentum.

[email protected] Kang Gu-gwi Reporter