Advising Glenwood Credit on Its Investment in Megazone Corporation and Acquisition Financing

Lee&Ko successfully advised Glenwood Credit in connection with the following transactions which occurred side by side: (i) an investment transaction pursuant to which Glenwood Credit provided a loan in an aggregate amount equal to KRW 600 billion to Megazone Corporation (such entity being the parent company of Megazone Cloud Corporation, a provider of cloud managed services) and acquired exchangeable bonds issued by Megazone Corporation in an aggregate amount equal to KRW 200 billion (the “Investment Transaction”), and (ii) an acquisition financing transaction undertaken by Glenwood Credit as borrower for the purposes of (among others) financing in part the Investment Transaction (the “Acquisition Financing Transaction”).

The Investment Transaction, in which Glenwood Credit participated as a bondholder, comprised a loan transaction with Megazone Corporation and an exchangeable bond acquisition transaction with Megazone Corporation, both of which were implemented on a concurrent basis. This called for specialized expertise in both asset classes (loans and exchangeable bonds) as well as detailed review and analysis of the terms and conditions of the relevant documentation and their precise interactions with one another from a documentary perspective. In addition to the Investment Transaction, the Acquisition Financing Transaction was pursued simultaneously in order to raise in part the funds necessary to complete the Investment Transaction. This resulted in a highly complex financing and investment structure and the preparation and negotiation stages of these transactions necessarily occupied an extended period of time. In particular, in order to close on time three separate finance and investment transactions that were inherently related to one another, it was necessary to harmonise terms across different instruments to an appropriate degree and to coordinate effectively the interests of the involved parties. This in turn required meticulous legal expertise and responsive project management, both of which Lee&Ko successfully delivered.

From the structuring stage of the transaction through to financial close, Lee&Ko provided comprehensive legal advice and assistance to Glenwood Credit, in its capacities as bondholder under the Investment Transaction and the borrower under the Acquisition Financing Transaction, including preparation of the loan agreement, exchangeable bond acquisition agreement and acquisition financing loan agreement, negotiation of terms with its counterparties and their counsel, and preparation and review of the closing deliverables. Based on its extensive experience and expertise accumulated through advising on numerous acquisition financing transactions, Lee&Ko devised an optimal financing structure that balanced the needs of the bondholder, the bond issuer and the acquisition financing lenders, and successfully supported the timely closing of each financing transaction despite the tight and rapidly evolving transaction schedule.