Curious Partners Invests KRW 105 Billion in SLL JoongAng, Securing KRW 130 Billion in Collateral from the Owner Family [fnMarketWatch]

[Financial News]  Curious Partners, a private equity firm specializing in corporate restructuring, is making a structured investment worth KRW 105 billion in SLL JoongAng, a core content-production company of JoongAng Group. Going beyond a simple liquidity injection, the investment is designed to overhaul SLL JoongAng’s borrowing structure and existing Praxis Capital Partners investment at the same time, creating a structure that can support a normal M&A transaction in the future. It is effectively a bridge investment.
In particular, the JoongAng family owners have agreed to provide approximately KRW 130 billion in collateral, including listed shares of BGF Retail. As the normalization of SLL JoongAng is linked to rehabilitation proceedings involving JoongAng Holdings, ContentreeJoongAng and other group affiliates, the owner family is also contributing to the restructuring.
According to investment banking industry sources on the 10th, Curious will invest a total of KRW 105 billion in SLL JoongAng using, among other vehicles, a blind fund for corporate financial stabilization. The structure involves purchasing KRW 50 billion of convertible bonds issued by SLL JoongAng and acquiring KRW 55 billion worth of the convertible preferred shares held by Praxis Chateau Holdings.
As conditions for the investment, Curious required SLL JoongAng to comply with financial covenants related to its finances and business, secure stable maturity extensions for existing creditor financial institutions and Praxis Capital Partners’ acquisition financing, and obtain collateral from the owner family.
The CB investment will be used, among other purposes, to repay KRW 35 billion in public bonds maturing on the 23rd. Praxis Chateau Holdings will also use the entire KRW 55 billion in proceeds from the CPS sale to repay existing acquisition financing. The structure addresses the liquidity problems of both SLL JoongAng and its existing shareholders.
Investment banking industry sources interpreted the core of the transaction as creating a capital structure that would enable the normal sale of SLL JoongAng. With major JoongAng Group affiliates undergoing rehabilitation or workouts, SLL JoongAng had also faced difficulties refinancing after its credit ratings fell to B- for corporate bonds and C for short-term electronic bonds.
However, SLL JoongAng is a core content-production asset of the group, generating average annual revenue of approximately KRW 570 billion and holding 179 content IPs and 72 original productions for global OTT platforms. Once its financial structure is stabilized, the company could pursue a normal M&A transaction with a strategic investor or financial investor.
Curious reduced downside risk by combining collateral with a waterfall structure that differentiates the order in which investment proceeds are recovered. It is targeting a private-equity-fund IRR in the mid-to-high teens through an eventual exit via an M&A transaction involving SLL JoongAng.
An investment banking industry official said, "Rather than simple liquidity support, this is a special-situations investment that combines SLL’s bonds, Praxis Capital Partners’ acquisition financing and the owner family’s collateral into a single structure." The official added, "If the normal sale of SLL becomes a reality, it could mark a turning point in the restructuring of JoongAng Group as a whole."
Meanwhile, Curious currently manages a blind fund for corporate financial stabilization worth approximately KRW 430 billion. This is its fifth investment, following Homeplus, Hanmi Science, Ido and Daewoo Development Engineering & Construction. Recently, it exited its investment by selling a 100% stake in Woojin Gijeon to Kostone Asia for KRW 297 billion, achieving an IRR of 23.2% on a private-equity-fund basis.


[email protected] Kyung-ah Kim Reporter