Odin Holdings on Monday night sold its entire stake in Korea Aerospace Industries in a block trade worth up to $143 million, according to a term sheet.
Private equity firm Odin held a 5% stake in the aircraft manufacturer and last night aimed to sell up to 4.9 million shares at a price range of 30,360 - 30,990 won each ($28.29- $28.88).
Shares priced overnight in Hong Kong at 30,830 won, a 3.5% discount to the February 10 close.
The stock opened the day’s trading at 31,700 won, hitting a peak of 32,800 won before settling at 31,950 won. Korea Aerospace shares are up 29% since the start of the year.
Nomura and Credit Suisse acted as joint bookrunners on the deal.
The South Korean company manufactures military and civilian aircraft carriers, as well as airplane components and satellite systems. The company also performs maintenance, repair and overhaul services for aircraft.
Demand was particularly robust amongst Korean long-only institutional investors, according to one person familiar with the deal, although he notes the aircraft company’s story sold well with international players as well, including hedge funds.
“The demand gave the book good momentum [and so] the price ended up very close to the top end of the range,” the person said. The shares were initially offered at a 3-5% discount.
Institutional investors tend to like niche companies, and Korea Aerospace’s military manufacturing capabilities give the company “a certain novelty” factor, the person said, although he notes it was the company’s strong defence aircraft order book in the last few quarters that appealed to investors.
A good order book is always “marked very positively”, and after the company reiterated this in their earnings guidance last Thursday, the company “got some good headwinds behind the momentum”, he added.
Odin meanwhile, which has held Korea Aerospace shares since its 2011 IPO, felt the solid performance recently made it an ideal time to exit, the person said.
Shares reacted favourably on Tuesday, hitting 32,350 won mid-morning.