Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

K Car Listing: Final Allocation, Lockup Schedule, & Immediate Float

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Equity Capital Markets

<h2>Offering overview</h2><p>K Car (formerly known as SK Encar), the largest used car brokerage company in Korea, has filed a securities declaration. K Car will be listed on the KOSPI, and a total of 16.83M shares will be offered through this IPO. This is 35.90% of the total number of shares before listing. The amount allocated to institutions is 55-75%.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bourse"}'>Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-IPO SO"}'>Pre-IPO SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46884369}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[-3]">46,884,369</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16830288}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[3]C[-3]"><strong>16,830,288</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.35897439506970863}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[5]C[-3]"><strong>35.90%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Institutional allotment"}'>Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":9256659}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=Terms!R[5]C[-3]">9,256,659</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of the offering"}'><strong>- % of the offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5500000356500139}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-3]C[0]"><strong>55.00%</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Yes, we have a massive secondary offering here. The secondary offering percentage is a whopping 92.86%. This is basically a private equity-owned company. One of the largest local PEs, Hahn &amp; Company, owns a full 100% stake. It acquired full ownership from SK Inc in 2018. Hahn &amp; Co has been pushing to sell its stake in K Car since last year. The most well-known candidate was Lotte Rental. However, as these attempts ended in vain, Hahn &amp; Co opted for an exit strategy through IPO.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Primary %"}'>Primary %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07142860538096556}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[2]C[-3]">7.14%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Secondary %"}'><strong>Secondary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9285713946190345}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[3]C[-3]"><strong>92.86%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO shares outstanding"}'>Post-IPO shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":48086533}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-10]C[0]+Terms!R[1]C[-3]">48,086,533</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.025641040407305044}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[3]C[-3]"><strong>2.56%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.025000014037194155}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[3]C[-3]">2.50%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholding"}'>Shareholding</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Post IPO"}'>Post-IPO</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Lock-up"}'>Lock-up</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hahn &amp; Company"}'><strong>Hahn &amp; Company</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6499999698460274}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/Terms!R14C5"><strong>65.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":31256245}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>31,256,245</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1 year"}' data-sheets-numberformat='[null,2,"#,##0",1]'><strong>1 year</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP (post-IPO)"}'>ESOP (post-IPO)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0699999935532886}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/Terms!R14C5">7.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3366057}' data-sheets-numberformat='[null,2,"#,##0",1]'>3,366,057</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1 year"}' data-sheets-numberformat='[null,2,"#,##0",1]'>1 year</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"IPO"}'>IPO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.280000036600684}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/Terms!R14C5">28.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13464231}' data-sheets-numberformat='[null,2,"#,##0",1]'>13,464,231</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,2,"#,##0",1]'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total"}'>Total</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[1]/Terms!R14C5">100.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":48086533}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])">48,086,533</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,2,"#,##0",1]'>-</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The schedule is as follows. The book opens on September 13th and closes on the 28th. The payment date is October 6, and the listing date will be announced later.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'>Book open</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44452}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 09. 13</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'>Book close</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44467}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 09. 28</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'>Allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44468}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 09. 29</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44469}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 09. 30</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44475}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 06</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}'>TBA</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Offering overviewK Car (formerly known as SK Encar), the largest used car brokerage company in Korea, has filed a securities declaration. K Car will be listed on the KOSPI, and a total of 16.83M shares will be offered through this IPO. This is 35.90% of the total number of shares before listing. The amount allocated to institutions is 55-75%.





Offering size

Bourse
KOSPI


Pre-IPO SO
46,884,369


Offering
16,830,288


- % of SO
35.90%


Institutional allotment
9,256,659


- % of the offering
55.00%

Source: DART

Yes, we have a massive secondary offering here. The secondary offering percentage is a whopping 92.86%. This is basically a private equity-owned company. One of the largest local PEs, Hahn &amp; Company, owns a full 100% stake. It acquired full ownership from SK Inc in 2018. Hahn &amp; Co has been pushing to sell its stake in K Car since last year. The most well-known candidate was Lotte Rental. However, as these attempts ended in vain, Hahn &amp; Co opted for an exit strategy through IPO.





Split

Primary %
7.14%


Secondary %
92.86%


Post-IPO shares outstanding
48,086,533


Capital increase rate
2.56%


Dilution
2.50%

Source: DART










Shareholding
Post-IPO
Shares
Lock-up


Hahn &amp; Company
65.00%
31,256,245
1 year


ESOP (post-IPO)
7.00%
3,366,057
1 year


IPO
28.00%
13,464,231
-


Total
100.00%
48,086,533
-

Source: DART

The schedule is as follows. The book opens on September 13th and closes on the 28th. The payment date is October 6, and the listing date will be announced later.





Schedule

Book open
2021. 09. 13


Book close
2021. 09. 28


Allotment
2021. 09. 29


Subscription
2021. 09. 30


Payment
2021. 10. 06


Listing
TBA

Source: DART



K Car (Korea's Carvana?): Offering Details, Pricing Structure, & Valuation Issues