Shin & Kim Advises TK Chemical on its Acquisition of Korea Line Corporation

Shin & Kim advised a consortium led by TK Chemical (an affiliate of the SM Group) in the open competitive bidding for Korea Line Corporation, the world’s 2nd largest bulk shipping company, which has been recently rehabilitated, resulting in the successful execution of an investment agreement on September 17, 2013. 

Pursuant to the investment agreement between the TK Chemical consortium and Korea Line Corporation, the management rights in Korea Line Corporation will be transferred to the TK Chemical consortium through the issuance of new shares (50% + 1 share) and corporate bonds, amounting to KRW 215 billion in total. The acquisition is expected to close by the end of this year after full payment of the acquisition price, issuance of the new shares and corporate bonds, appointment of the new management, and court approval to close the rehabilitation proceedings, among others.

Earlier in the transaction, the 2nd and 3rd ranked bidders filed an application for provisional disposition, seeking a court order to suspend the acquisition by the TK Chemical consortium, by claiming that the bidder selection process was unfair. Shin & Kim vigorously defended the TK Consortium by arguing that the preferred bidder selection process was fair and transparent and that the failed bidders have no interest in making the application for provisional disposition, developing legal theories in support of these arguments based on relevant court precedents. As a result, the court dismissed the 2nd and 3rd ranked bidders’ application.