MBK Partners, the largest shareholder of Golfzon County, issued a statement opposing the sale of Golfzon County and warning of legal action against Golfzon Holdings.
MBK said that Golfzon Holdings’ position “merely distorts the clear essence of the legally binding contract signed by both parties and constitutes an unreasonable argument that undermines basic common sense in the capital markets.”
In a statement on Thursday, MBK said, “The guarantee of management control was a conditional structure premised on the success of an initial public offering (IPO).”
The company added, “At the time of the investment in 2018, both parties clearly prepared for the possibility that the IPO might fail and definitively stipulated a clause granting MBK Partners the right to sell management control to a third party, including Golfzon Holdings’ shares, through a drag-along provision.”
In 2018, MBK Partners invested 114 billion won in Golfzon County through its special purpose vehicle, Korea Golf Infrastructure Investment. It subsequently made additional investments totaling 288 billion won through four rights offerings (paid-in capital increases). Currently, MBK Partners holds a 58.37% stake in Golfzon County (54.83% common shares and 3.54% convertible preferred shares), while Golfzon Holdings holds 41.63%.
In a statement the previous day, Golfzon Holdings said, “We clearly state that we cannot agree to MBK Partners’ unilateral push to sell Golfzon County, which runs counter to the original intent of the investment and cooperation.”
Golfzon Holdings claimed that it accepted MBK Partners’ investment on the premise of an IPO and a guarantee of management control, and that it leased four golf courses owned by the company to Golfzon County at low rental rates without any security deposit.
Regarding the lease agreements for the four golf courses, MBK Partners stated, “These are contracts lawfully established through business judgment and mutual agreement between both parties at the time of the investment from MBK Partners in 2018.” The company added, “We will firmly and strictly hold Golfzon Holdings accountable for its baseless distortion of facts, market disruption, and breach of contract.”
Concerning the sale process, MBK Partners said, “Before officially initiating external sale procedures, we formally offered and proposed a priority acquisition opportunity to Golfzon Holdings.” The company claimed, “The acquisition terms (price and deal structure) ultimately proposed by Golfzon Holdings were inferior and non-competitive compared to the proposal from Duesina Group, which was a competing bidder.”
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