IGIS Asset Management is halting the sale process for the Centerfield asset in Yeoksam-dong, Gangnam-gu, Seoul, and is officially starting talks among beneficiaries to extend the fund's maturity. Observers said the conflict between the manager and key beneficiaries over the sale has entered a winding-down phase.
According to the investment banking (IB) industry on the 27th, IGIS Asset Management decided to withdraw the sale of Yeoksam Centerfield. The change in position by key beneficiaries Shinsegae Property and the National Pension Service is said to be behind the halt.
IGIS Asset Management said, "We received an official request from Shinsegae Property to extend the fund's maturity, and confirmed that the National Pension Service (NPS) also believes securing an operating period is needed rather than a sale," adding, "Accordingly, we have stopped the sale process that was underway and will prioritize talks to extend the maturity to ensure stable fund management and enhance beneficiary interests, in consultation with all beneficiaries."
Previously, IGIS Asset Management had been proceeding with selecting a sell-side adviser in preparation for the maturity of the Yeoksam Centerfield fund. IGIS Asset Management said, "As an asset management company (AMC), we have sought the best options to protect beneficiaries' interests based on the duty of care."
The fund holding Yeoksam Centerfield matures in Oct. this year. IGIS Asset Management had pushed for an asset sale in line with the maturity, but the National Pension Service and Shinsegae Property opposed a sale, saying the timing was not appropriate given market conditions and the asset's competitiveness. In particular, Shinsegae Property had said of IGIS Asset Management's sale process that it "plans to consider all possible measures, including legal action, as an investor."
Recently, however, key beneficiaries showed a positive stance on extending the fund's maturity, changing the situation. In the industry, the view is that as key beneficiaries Shinsegae Property and the National Pension Service shifted to a forward-leaning position on an extension, the conflict over the sale has effectively moved toward closure. The Yeoksam Centerfield fund is owned 49.7% each by the National Pension Service and Shinsegae Property.
Yeoksam Centerfield is a prime office complex built on the former Renaissance Hotel site on Teheran-ro in Seoul, and is a symbolic asset with the five-star hotel "Josun Palace" as a tenant. It is seen as generating stable cash flow by securing many blue-chip tenants, and the market values the asset at around 2 trillion won.
IGIS Asset Management said, "We will faithfully carry out the related procedures so that Centerfield's performance built so far can continue during the extended fund period," adding, "We will put beneficiary interests and the fund's stable operation first as we proceed with discussions."