Nongshim Co., South Korea’s top instant noodle maker, has expressed keen interest in buying Woongjin Foods Co., a beverage unit of cash-strapped Woongjin Group, industry sources said Friday.
The move comes as Woongjin Holdings Co. and its creditors have reached an agreement on sales of the food unit to ramp up
Woongjin’s debt rescheduling program. The mid-sized group has been placed under court receivership last year due to financial difficulties.
Nongshim has vowed to strengthen beverage business this year to make up for a loss in mineral water business after losing the exclusive right to distribute Samdasoo, the country’s top bottled water brand. The move could cut its sales by about 200 billion won (US$188 million).
Woongjin’s creditors have sent a proposal to Nongshim and several other local food companies to sell Woongjin Foods, maker of fruit juices and teas, according to industry sources.
Woongjin Foods generated 219.5 billion won in sales in 2011 and posted a net profit of 7 trillion won. Woongjin Foods is headquartered in Gongju, about 160 kilometers south of Seoul.
The latest move comes just weeks after Woongjing Holdings completed the sale of its flagship unit Woongjin Coway Co., South Korea’s top water purifier maker, to MBK Partners Ltd. as part of its efforts to improve its financial health. MBK Partners is a local private equity fund.
Woongjin Holdings has also agreed with the creditors to sell its chemical unit, Woongjin Chemical Co. (Yonhap News)
