Lee & Ko provided legal advisory services in connection with the acquisition of 92.6% of the newly issued shares of Powernet Technologies Corporation by a special purpose company, Chunggang Co., Ltd., which is a wholly owned subsidiary of KB-Glenwood Private Equity Fund whose general partners are KB Investment & Securities Co., Ltd. and Glenwood Investments. The investment agreement was executed on December 16, 2009. The new shares were issued and the transaction closed on December 23, 2009.
Although there have been cases where a private equity fund acquired a company that was in the process of work-out, this transaction marks the first time that a private equity fund acquired the control of a company that was in the process of reorganization. Because this deal had to proceed within the framework of the reorganization process, it was more complex than typical M&A deals where a private equity fund acquires the control of an ordinary company. In addition to handling typical due diligence and negotiation, this deal involved obtaining court approvals . Despite this added complexity, Lee & Ko’s Securities & Finance Group was able to complete this transaction successfully by cooperating closely with its client.