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SK Securities headquarters in Yeouido, Seoul. (Photo courtesy of Yonhap News) |
[Alpha Biz= Paul Lee] Korea Development Bank (KDB) and its subsidiary KDB Capital played a decisive role in the change of control at SK Securities in 2018, providing critical financial backing to the acquisition and subsequent control structure.
To facilitate the takeover of SK Securities, KDB Capital participated as an anchor limited partner (LP) in a private equity fund managed by J&W Partners, led by then-CEO Kim Shin (currently Vice Chairman of SKS PE), and also arranged acquisition financing. Notably, the executive who spearheaded the investment at KDB Capital later moved to an SK Securities affiliate, continuing to support the financial structure underpinning Kim’s control of the brokerage.
According to investment banking sources on the 27th, KDB Capital committed KRW 10 billion to the fund J&W Partners established in 2018 to acquire SK Securities—the largest contribution among all LPs. The investment was led by Lee Beom-hee, then head of corporate finance at KDB Capital and now CEO of NBH Capital.
Three years later, SK Securities acquired NBH Capital (formerly AJ Capital) by investing in a fund established by Rio Invest. Shortly thereafter, Lee left KDB Capital and assumed the role of CEO at NBH Capital. SK Securities invested KRW 26 billion in the fund created to acquire NBH Capital, securing a 95.94% stake and effectively becoming the sole LP.
KDB has continued to support J&W Partners and Kim’s control over SK Securities by providing acquisition financing since the initial takeover. To date, the loan has been refinanced four times. As SK Securities’ share price declined, the value of the 19.6% stake in SK Securities pledged by J&W as collateral fell below the outstanding loan amount of KRW 61 billion. Even with a 30–40% control premium applied, there were instances where the collateral value was insufficient to fully cover the loan.
Despite this, the lending consortium led by KDB increased the loan amount from KRW 61 billion to KRW 75 billion in September last year and extended the maturity by two years.
NBH Capital also participated in the refinancing, lending KRW 4.9 billion to J&W Partners. This effectively created a circular financing structure in which funds flowed from J&W → SK Securities → Rio Invest → NBH Capital → J&W, raising questions about governance and financial independence.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
