Private equity firm La Defense Partners has stepped up as an ally to the Oscotec founder's family. La Defense previously joined hands with Chair Song Young-sook and her daughter during the Hanmi Pharmaceutical Group management control dispute, and this time it decided to embark on work to stabilize governance together with the heir of the late Oscotec Chair Kim Jeong-geun, Kim Seong-yeon.
According to the investment banking (IB) industry on the 9th, La Defense will push to improve the governance structure surrounding Oscotec and U.S. subsidiary Genosco together with Kim's side.
La Defense said it is "for the proportional interests of all shareholders, not the private interests of a particular individual," but in the market, the prevailing view is that La Defense has taken on the role of ally to the Oscotec founder's family. This is because, amid a situation where securing funds for inheritance tax and cleaning up Genosco equity are intertwined after the founder's death, La Defense has taken on the role of centralizing the negotiation channel on behalf of Kim Seong-yeon's side.
Uncertainty related to governance has grown at Oscotec since Chair Kim died in Feb. Kim's Oscotec equity is set to be inherited by the eldest son, Kim Seong-yeon, but the inheritance tax burden is significant. The value of Kim's stake was estimated at about 240 billion won at the time of death, and considering the control premium for the largest shareholder's equity, some analysis suggested the family's inheritance tax burden could reach 120 billion to 140 billion won.
The problem is that the founder family's control could weaken in the process of securing funds for the inheritance tax. Even if Kim Seong-yeon inherits Chair Kim's Oscotec equity, the stake would remain in the 12% range, leaving little gap with the second-largest shareholder's equity.
Oscotec has also been in conflict with minority shareholders over making Genosco a wholly owned subsidiary and over the valuation of the company. As Kim holds about 13% equity in Genosco, the market has raised the possibility that Kim could exchange or sell that equity for Oscotec shares and use the proceeds as inheritance tax funds.
This is also why La Defense has moved to the forefront. Rather than Kim's side dealing directly with the company, shareholders, and outside investors, it is interpreted that they put forward La Defense as the negotiation channel to resolve the valuation of Genosco shares, the cleanup of equity, and the stabilization of Oscotec's governance.
La Defense previously played a similar role in the Hanmi Pharmaceutical Group management control dispute. Together with Chair Song Young-sook, Vice Chair Im Ju-hyeon, and Hanyang Precision Co. Chair Shin Dong-kuk, it formed the so-called "four-party alliance" and secured Hanmi Science equity through a special-purpose company (SPC). Afterward, La Defense CEO Kim Nam-gyu was appointed as an outside non-executive director at Hanmi Science, joining the board.