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Hahn & Co. eyes W300b in partial exit from secondhand car retailer IPO

A logo of K Car
A logo of K Car
South Korea-based private equity firm Hahn & Co. is poised to cash in on 306.6 billion won ($258.1 million) from an initial public offering of a fully-owned secondhand car retailer K Car on Wednesday, according to a prospectus Tuesday.

The deal is aimed at floating Hahn & Co.’s 25.5 percent stake, or 12.3 million shares, in K Car, plus 1.2 million new shares. The IPO price of K Car, which is valued at 1.2 trillion won, has been fixed at 25,000 won apiece.

Hahn & Co.’s initial public offering to retail investors ended Friday, and the related transactions will be complete by Wednesday. Its remaining controlling ownership will be subject to a one-year lock-up period.

This comes three years after Korea’s second-largest buyout firm bought the entire stake in K Car for about 200 billion won, or one-sixth of its current valuation, from Korea’s SK conglomerate. Before the acquisition, K Car was SK Encar’s retail sales operation.

After years of investment to hone e-commerce capacity, the IPO gave Hahn & Co. an opportunity to reap more than what it sowed through the partial exit from Korea’s largest used car retailer and e-commerce technology platform by online sales.

But the deal involving what could be a Korean equivalent to US-based Carvana came as a disappointment to Hahn & Co., as the investment firm had sought to secure up to 675 billion won from the IPO, according to the filing.

This came as the K Car IPO drew lackluster attention from investors, despite a record growth in profits. Its first-half operating profit came to 38.4 billion won, up over twofold on-year.

K Car’s IPO price was fixed at 25,000 won apiece during the book-building process with institutional investors, lower than the bottom of the target price band at 34,300 won. NH Investment & Securities and Goldman Sachs’ Seoul branch were lead underwriters.

This appears to be following the footsteps of Lotte Rental’s ongoing drawdown of stock price after its listing in August.

Lotte Rental, Korea’s first used-car retailer to be traded on the Korea Exchange, saw its stock price slide to as low as 37,000 won apiece on Tuesday, from its IPO price at 59,000 won that allowed Lotte Rental to take 850.9 billion won in IPO proceeds.

K Car is scheduled to start trading on the KRX’s main bourse Kospi on Oct. 13.

By Son Ji-hyoung (
Korea Herald Youtube