This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:28 p.m. on Mar. 9, 2026.
EQT Partners, the private equity fund (PEF) manager of Sweden's Wallenberg family, has formally begun work to sell Aequon Capital and the savings bank. While the sell-side has suggested a corporate value in the low-to-mid 1 trillion won range, some potential buyers are voicing skepticism about the likelihood of a transaction being completed.
According to the investment banking (IB) industry on the 9th, EQT Partners recently sent an information memorandum (IM) to potential bidders for the sale of Aequon Capital and Aequon Savings Bank. The sale target is 96.06% equity of Aequon Capital, and since Aequon Capital owns 100% equity of Aequon Savings Bank, selling the two companies as a package is seen as likely. However, a split sale is also reportedly under review depending on buyer demand.
The corporate value suggested by the sell-side is in the low-to-mid 1 trillion won range. The figure applies the industry average price-to-book ratio (PBR) of 0.98 to 1.04 times to Aequon Capital's shareholders' equity (around 1.19 trillion won). Considering that capital companies typically trade around 1 time PBR, some say the sell-side's hoped-for valuation is not unreasonably high on the surface.
However, potential buyers say the price is high. The biggest concern is that Aequon Capital's asset portfolio has a high proportion of relatively risky assets such as real estate project financing (PF) and loans to small and midsize corporations. As of the end of September last year, Aequon Capital's real estate PF outstanding loan balance was about 594.1 billion won. Of that, nonresidential business sites accounted for 32% and mezzanine and junior loans 48%, leading to assessments that there is potential for losses depending on real estate market fluctuations.
The overall environment for the sector is not favorable either. High interest rates in recent years and a slowdown in the real estate market are raising concerns about the asset soundness of capital companies and savings banks. As the possibility of real estate PF delinquencies expands, there have been successive cases of outlook downgrades to the credit ratings of savings banks and capital companies. In the capital sector, if PF delinquencies begin to be recognized in earnest, there is also concern that additional provision burdens could increase. Credit rating agencies see the scale of PF-related substandard-and-below loans growing rapidly, which could increase soundness pressure across the sector going forward.
Aequon Capital's structural limitations are also cited as factors that could hinder a successful sale. Unlike capital companies affiliated with financial holding groups, as an independent capital company it lacks competitiveness in funding costs. Capital companies do not take deposits and raise funds by issuing specialized credit financial bonds, among other methods, and Aequon Capital's cumulative funding cost ratio was about 5.3% as of the third quarter of last year, higher than competitors.
Aequon Savings Bank is also in a tough spot. Although it ranks fifth in the industry with assets of more than 6 trillion won and has the advantage of operating in the Seoul metropolitan area, there are concerns that its profitability has deteriorated sharply. It posted an operating loss of 12.2 billion won in the third quarter of last year, swinging to a loss from a profit a year earlier (operating profit of 36 billion won), and during the same period, net income also turned from 30 billion won to a net loss of 9.1 billion won. Analysts say the sector-wide profitability of savings banks has weakened due to concerns over real estate PF delinquencies and a narrower loan-deposit margin.
Given these circumstances, the gap between the sale price and industry conditions is seen as the biggest variable for a transaction to close. In fact, EQT Partners approached potential buyers to sell Aequon Capital starting last year, but reportedly few showed interest in acquiring it.
An industry official said, "Both capital companies and savings banks currently face structural problems of real estate PF risk and slowing profitability, so investors are taking a cautious approach," and added, "Whether the sale succeeds will depend on how stably they can manage the burden of refinancing high-interest bonds and when the savings bank's performance will recover."