MBK leads $122.6m acquisition of Korea’s HK Mutual Bank

MBK Partners, a North Asian-focused private equity fund manager, has led a $122.6 million purchase of a controlling stake in Korea’s HK Mutual Savings Bank.

MBK Partners, a buyout firm, together with a strategic partner Hyundai Capital Service, a unit of Korea’s car maker Hyundai Motor, are acquiring a 58.4 percent stake in Korea’s HK Mutual Savings Bank.

The transaction value for the controlling stake in Korea’s second largest mutual bank is 117.4 billion Korean won ($122.6 million; €95.8 million), according to MBK Partners. The deal, subject to regulatory approval, is expected to be completed by early October.

Meanwhile, Lone Star’s lucrative sale of Korea Exchange Bank to Kookmin Bank continues to be held up by investigations by Korean prosecutors who are determining if the bank’s financial weakness was overstated when it was acquired in 2003. Some say the multi-billion dollar profit Lone Star stands to make from the exit has created a nationalistic backlash against foreign funds’ investments in Korea.

MBK, registered with Korea’s Financial Supervisory Services as a domestic fund, will become the largest stakeholder in HK Mututal. Together with Hyundai Capital, the second largest shareholder, MBK will appoint all the representatives on the board, said Jay Bu, a partner at MBK.

MBK will buy a 39.9 percent stake in the bank for 80.2 billion won ($83.9m; €65.4m), while Hyundai Capital will acquire an 18.5 percent stake for 37.2 billion won. Hyundai Capital provides auto-finance leasing.

MBK and Hyundai bought the stake via a private placement of new shares by the bank. Proceeds from the stake sale will be used to recapitalize the bank, to raise its capital adequacy ratio to above 10 percent from 3 percent prior to the investment.

MBK Partners, founded by former executives from The Carlyle Group, raised $1.56 billion for its maiden fund that held a final close in July.