The largest shareholder of the electric actuator corporation Enertork will change from West Japan Electric to the small private equity fund operator Buco Company after 25 years. Enertork's stock has been lackluster for a long time, leading to increased investor interest over whether the change in the largest shareholder to a private equity fund will add upward momentum to the stock price.
Buco Premium Private Investment Limited Partnership completely acquired 1,161,715 shares (11.91%) of Enertork held by West Japan Electric for 7.3 billion won on the 11th. The purchase price per share was 6,300 won, approximately 10% discounted from the previous trading day's closing price of 6,970 won.
Buco Premium is a management participation fund established by Buco Company earlier this month, with IBK Capital as the largest contributor holding 15.21% equity. Buco plans to recommend new executives for appointment at the upcoming shareholders' meeting. Currently, the articles of incorporation state that the board of Enertork consists of 7 members, so it appears that 1 additional inside director will be appointed from the current 6 members.
On the same day, Buco Premium also decided to purchase 5 billion won worth of the second tranche convertible bonds (CB) issued by Enertork. The convertible shares total 665,956 shares, corresponding to 6.83% of the total issued shares. Buco Premium completed the payment on the 14th. The conversion request period will start from July 14, 2026, and the bond maturity date is July 14, 2030.
The conversion price of the second tranche CB is set at 7,508 won per share, about 8% more expensive than the previous trading day's closing price of 6,970 won. Furthermore, the absence of call options (stock purchase rights) and put options (stock sale rights) indicates that there is less risk of early repayment, which suggests that the transaction is focused on expanding equity. The funds from the CB will be used for development and facility expenses.
Established in 1987, Enertork has maintained a cooperative relationship since forming a technological partnership with West Japan Electric in 1991. In 2000, prior to its KOSDAQ listing in 2006, West Japan Electric subscribed to a capital increase, thus becoming the largest shareholder, but did not participate in actual management, leaving the company to its founder, Chairman Jang Deok-in, and the owner family.
Since 2017, Chairman Jang's son, Jang Ki-won, alternated as co-CEO and sole CEO until he stepped down from all positions last March for personal reasons. Afterward, Chairman Jang's son-in-law, Lee Cheong-yeol, was appointed as the inside and representative director to manage the company. Enertork plans to maintain its operational partnership even after the sale of the shares by West Japan Electric.
The new largest shareholder, Buco Company, is expected to focus on expanding corporate value with the current management for future exit strategies (investment recovery). Buco Company was established in 2020 as a small house focused on mergers and acquisitions of small and medium-sized enterprises, founded by CEO Yang Hee-jun, who previously served as an executive at our PE Asset Management and as the head of Melon Partners.
Investors are closely monitoring how the change in the largest shareholder amid recent improvement in the company's performance will affect the stock price. Just three years ago, the stock price reached 13,000 won but had been in continuous decline due to poor performance since then.
Enertork has been working towards performance recovery after successfully turning its operating profit into the black last year. Last month, it completed a supply contract worth 1.9 billion won for the Shin Hanul Nuclear Power Plant Units 3 and 4, and plans to develop new products in collaboration with Sogang University and Hanyang University through an industry-academic cooperation project.
In May, following the news of the signing of a nuclear reconstruction by the Donald Trump administration and the signing of a memorandum of understanding (MOU) between Korea Hydro & Nuclear Power and Oklahoma in June for technology development, Enertork was grouped with nuclear-related stocks and rose to 9,070 won, but soon fell again. According to NH Investment & Securities, the average investor return stands at a negative (-) 25.41%, with the proportion of loss-making investors being 91.81%.
An official from Enertork stated, "As Buco Company comes in under management participation conditions, we will continue to provide sales-related reports," and added, "Currently, there are ongoing projects in the domestic nuclear power business, and since we are the only corporation that has received operational certification for domestic products, we will also focus on expanding our overseas business."