This article was published on Aug. 5, 2025, at 7:55 a.m. on the ChosunBiz MoneyMove site.
The management rights of CGI Holdings, the Asia region holding company of CJ CGV, will ultimately be forcibly sold. This comes as CJ CGV did not exercise the call option to repurchase the equity from financial investor (FI) and second-largest shareholder MBK Partners and Mirae Asset Securities Private Equity Consortium, despite their notification of the drag-along right.
According to investment banking (IB) industry sources on the 5th, CJ CGV's decision and notification deadline regarding the exercising of the call option for CGI Holdings has finally expired the previous day without a response. It has been 10 business days since MBK Partners and Mirae Asset Securities Private Equity Consortium notified their intention to exercise the drag-along right on the 21st of last month. Initially, it was known to be until the 1st of this month, but the first day of notification was excluded.
As a result, the MBK Partners and Mirae Asset Securities Private Equity Consortium has officially secured the authority to sell CJ CGV's equity, including its holdings, to a third party. This is based on the shareholder agreement made when acquiring CGI Holdings' equity in 2019, which stipulates that the lack of response regarding the exercising of the call option within 10 business days will be considered a forfeiture of the equity repurchase.
Earlier, in 2019, the MBK Partners and Mirae Asset Securities Consortium participated in a capital increase conducted by CJ CGV and secured 28.57% of CGI Holdings' equity. They invested 333.6 billion won. At that time, they added a condition that CGI Holdings must be listed on the Hong Kong Stock Exchange with a valuation exceeding 2 trillion won by June 2023.
Additionally, if the listing fails, it was designed that CJ CGV would either guarantee a certain revenue (IRR) to repurchase the equity (call option) or that the FI could sell to a third party, combined with the major shareholder's equity, a so-called drag-along right. This was intended to ensure that the FIs could securely recover their investment.
The listing of CGI Holdings ultimately fell through. To be listed on the Hong Kong Stock Exchange, it needed to show profits for two consecutive years, but CGI Holdings posted a net loss of 24.4 billion won last year. In 2023, the net loss increased from 19.3 billion won, recording losses for three consecutive years, including a net loss of 10 billion won in 2022.
CJ CGV judged that the listing of CGI Holdings was virtually impossible and repurchased 8.7% of the equity held by FIs for 126.3 billion won last July, while extending the drag-along exercise point to this year (by the 19th of last month); however, it gave up acquiring the remaining 17.58% equity from the MBK Partners and Mirae Asset Securities Private Equity Consortium.
The MBK Partners and Mirae Asset Securities Private Equity Consortium has already begun the process of appointing a main underwriter for the complete sale of CGI Holdings' equity. It is reported that MBK Partners is leading efforts to directly engage with global investment banks (IBs) to successfully execute the sale of CGI Holdings.
Meanwhile, the amount CJ CGV failed to repay due to not exercising the call option is estimated to be around 200 billion won. This suggests that the minimum recovery limit for the MBK Partners and Mirae Asset Securities Private Equity Consortium is in the 200 billion won range; thus, if efforts to sell at around 200 billion won proceed, prospective buyers may emerge according to industry reports.