Three long-standing private equity investors offloaded their stakes in South Korean firm Hanmi Semiconductor on Tuesday, raising $36 million in the process by way of an accelerated block share sale.
Shares were priced at W14,600 ($14.34) a unit, at the bottom end of an initial W14,600 to W14,850 range and at a 3.9% discount to their June 23 close, reflecting South Korea's recently shaky stock market performance with the bellwether Kopsi Index down 1% since June 17.
Long-only institutional funds made up 80% of the book, according to a source close to the deal, and about 20 investors in all participated, split evenly between domestic and international investors.
Shares in Hanmi are are up 44% so far this year, easily outperforming the broader South Korean market, and are trading at around 9.69 times expected 2014 earnings, according to Bloomberg.
Presto Private Equity Fund, which is jointly managed by Kamur Investment Partners and Octave Capital Management Korea, sold 1.76 million shares in the semiconductor company, representing a 6.9% stake. Skylake Investment and Pinpoint Investment each sold 376,927 shares, or 1.5% stakes.
The shares were sold in board lots of 10, according to a term sheet.
All three private equity firms were invested in the company before its initial public offering on the Korea Stock Exchange in 2005. Given the company’s positive performance — the shares have doubled in value since then — they decided to cash in, the source said.
Hanmi supplies equipment to semiconductor packaging and manufacturing companies. Key customers include Samsung Electronics, SK Hynix, Amkor Technology, Infineon Technologies and STMicroelectronics.
CIMB acted as sole bookrunner on the block sale.
The Kopsi Index’s modest returns aside, South Korean equities remain appealing to Asian investors as the country offers exposure to emerging markets without much risk. Mainland Chinese investors are particularly keen on South Korean equities, data shows.
Chinese institutions invested W1.42 trillion into the South Korean stock market in the first six months of the year, according to media reports citing local brokerage firm Hana Daewoo Securities.