This article was published on Nov. 24, 2025, at 4:38 p.m. on ChosunBiz MoneyMove (MM).
Domestic private equity firm JKL Partners' subsidiary JKL Credit is exploring multiple ways to recover its investment in secondary battery packaging company DSEV. That is because Dongshin Motech, DSEV's parent company, recently filed for corporate rehabilitation amid financial difficulties, making fund recovery likely to be difficult.
On the 24th, investment banking sources said JKL Credit is weighing options to recover funds invested in DSEV. The most likely option is to exercise the stock warrants attached to the bonds with warrants (BW) it currently holds in DSEV to take control of the company. If JKL Credit exercises the rights, it is expected to secure majority shareholder status. DSEV's current largest shareholder is Dongshin Motech (88.60%).
In 2022 JKL Credit and Gyeongnam Venture Investment together invested about 70 billion won in DSEV. At the time JKL Credit selected DSEV as the first investment for its credit fund, the Future Mobility Value Chain Fund, which was formed with about 330 billion won. Reflecting expectations for industry growth from a surge in secondary battery demand, DSEV, which had annual sales of about 3.5 billion won, was valued at about 140 billion won.
However, as the secondary battery market was affected by a slowdown in electric vehicle market growth, DSEV's performance also experienced large swings. After recording net losses of 1.7 billion won and 13.4 billion won in 2021 and 2022 respectively, it returned to profit in 2023 but posted a net loss of 7.4 billion won last year. Its Polish unit's net profit also plunged from 7.5 billion won in 2023 to 2.2 billion won this year.
Continued business slump has left repayment capacity lacking. Although the maturity date of the BWs issued by DSEV is Dec. 2027, early redemption can be requested from Jan. 1 next year. But as of the end of last year, current assets were about 18 billion won and cash and cash equivalents were only 2.5 billion won. Considering the company's financial situation, JKL Credit also sought to lower the interest rate.
In this situation, Dongshin Motech's filing for corporate rehabilitation created a reef for fund recovery. Because the two companies are separate legal entities, the parent company's rehabilitation does not change the subsidiary's legal status, but ripple effects could occur during court receivership. Short- and long-term borrowings between the two companies and joint guarantees could be blocked, and internal transactions could also be suspended.
JKL Credit has taken as collateral all shares of its Polish and Canadian units to prepare for the worst. But industry sources say that because both companies are wholly owned subsidiaries of DSEV, it is more realistic to secure management rights by exercising the stock warrants rather than enforcing collateral rights.
An industry official said, "With parent company Dongshin Motech entering corporate rehabilitation, it appears they are reviewing ways to save their investment DSEV," and added, "However, because DSEV's shares have become a matter of management due to Dongshin Motech's rehabilitation filing, it will take some time."