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UPI
14 minutes ago
- Business
- UPI
Analysis: Business model of Asia's top private equity fund questioned
Kim Yeong-hee works at a Homeplus Geumcheon branch. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation photo by Jeon Heoo-Kyun/EPA-EFE SEOUL, June 20 (UPI) -- Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, founded MBK Partners in 2005. Over the next two decades, he built it into one of Asia's leading private equity funds through aggressive mergers and acquisitions. It now manages up to $30 billion in assets. However, Chairman Kim and MBK face challenges, because of its major investments in Home Plus, South Korea's No. 2 discount chain, and Lotte Card, the country's fifth-largest card issuer. This prompts experts to question the business model of the buyout fund. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation process. The firm stated that "All $1.8 billion worth of common shares held by MBK in Home Plus will be canceled without compensation." This means that MBK is ready to walk away from the Home Plus investment empty-handed, although it poured billions of dollars to take over the supermarket chain. In 2015, MBK acquired Home Plus from Tesco in a $5.1 billion deal financed through a combination of equity and debt. But the rise of e-commerce and the impact of the COVID-19 pandemic severely undermined its performance. Since 2021, Home Plus has reported losses for four consecutive years, and its debt-to-equity ratio surged to nearly 500% this year. It filed for corporate rehabilitation in March, and MBK eventually decided to relinquish all management rights and claims while receiving nothing in return. Yet, MBK is under pressure to do more, as the National Assembly Speaker Woo Won-shik noted during his visit to a Home Plus outlet in Seoul on Wednesday. He accused MBK of showing an irresponsible stance. "The livelihoods of some 100,000 people, who are directly and indirectly employed by Home Plus, are now at risk. The damage is already severe," Woo wrote on social media. "Even after initiating rehabilitation procedures, MBK failed to assume responsibility, instead shifting the burden to workers and merchants through delayed payments, asset sales, and store closures," he added. Woo hinted at potential legislative action, including a parliamentary hearing and new regulations targeting private equity funds. Lotte Card up for grabs There are other crucial tasks for MBK and its Chairman Kim, particularly regarding Lotte Card. In 2019, MBK partnered with Woori Bank to channel $1 billion for a 79.8% interest on Lotte Card. MBK holds 59.8% and Woori has the remaining 20%. MBK tried to sell its stake in Lotte Card in 2023, but failed. The fund strives to divest its stake once again by reportedly sending teaser letters to multiple potential bidders, including Hana Financial Group, last month. UBS is managing the sales, with preliminary bids expected to open as early as mid-July. It remains to be seen whether MBK will be able to dispose of Lotte Card this time. But the sale price is predicted to go down due to the recent setbacks of the company. Lotte Card's net profit for 2024 more than halved to $100 million compared to $269 million in 2023. During the first quarter of 2025, it netted $10 million in profit, down 42.4% from a year before. Two years ago, MBK reportedly hoped to secure at least $2.2 billion for its stake, but the price is feared to decrease substantially now, which may significantly reduce MBK's potential profit. "MBK's business model has been very successful over the past 20 years as shown by the fact that its founder Kim has become the wealthiest man in the country," Seoul-based consultancy Leaders Index CEO Park Ju-gun told UPI. "But, its business model is now being put to the test. The company would have to worry about its damaged reputation and growing political momentum for regulating private equity funds," he added. In the 2025 Forbes billionaire list, Kim was second to none among South Koreans with $9.5 billion in wealth, surpassing $8.2 billion of Samsung Electronics Chairman Lee Jae-yong. Park expected that the country's unicameral parliament might introduce an act curbing highly leveraged buyouts and banning private equity funds from directly managing companies after acquisition. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, echoed the concerns, although he opposed excessive regulations. "MBK has played a key role in developing Korea's capital market. But buyout funds have often been criticized for seeking short-term gains at the cost of long-term growth for a fast exit. We may need a reform," he said in a phone interview. "Highly leveraged acquisitions are also problematic. Still, I am against the idea of prohibiting private equity funds from managing their portfolio firms. It would fundamentally deny the very essence of the business," he said.
Reuters
14 minutes ago
- Business
- Reuters
Discounts deepen on Iranian oil in China as struggling teapots slow buying
SINGAPORE, June 20 (Reuters) - Sellers of Iranian oil to China are offering deeper discounts this month as they look to reduce inventories and as independent refiners slow their buying due to a jump in crude prices, traders and analysts said. Iranian Light crude oil is being traded at $3.30-$3.50 a barrel below ICE Brent for July deliveries, compared to a discount of around $2.50 for June, three traders said. Independent refineries, known as teapots, are the main Chinese buyers of Iranian crude. They are currently being squeezed by a $10 a barrel surge in crude prices since the Israel-Iran conflict began last week. Teapots in refining hub Shandong province are incurring their deepest losses this year, traders said. Consultancy Sublime China Information estimates average losses at 353 yuan ($49.15) per metric ton this week. Shandong refinery operations remained low at 51% of capacity as of June 18, down from 64% a year earlier, Sublime data showed. STORAGE RISING Meanwhile, stocks of Iranian oil, including in Chinese storage, in tankers near and off Chinese ports awaiting discharge, and in floating storage near Malaysia and Singapore, amount to roughly 70 million barrels, according to analytics firm Vortexa. That is enough for two months' demand for Iranian oil from China, the biggest buyer. Data from tanker tracker Kpler points to a stockbuild of more than 30 million barrels this year in floating storage. Both Kpler and Vortexa estimate total Iranian oil on the water, including floating storage, at nearly 120 million barrels, the most since at least 2023. Recent U.S. sanctions on three Chinese teapots curtailed buying from several mid-sized independents worried about being designated, Reuters has reported. One trader estimated the volume of Iranian supply to China replaced by non-sanctioned barrels at 100,000 barrels per day in the first half of 2025 - a fraction of the 1.4-1.5 million bpd of Iranian oil being delivered to China. ($1 = 7.1819 Chinese yuan renminbi)
Global News
14 minutes ago
- Climate
- Global News
More evacuation orders to be lifted in parts of northwestern Manitoba after fires
Residents of Flin Flon will be able to start coming home next week as officials in the northwestern Manitoba city lift its mandatory evacuation order. A social media post from the city says the order is expected to be lifted at 9 a.m. on June 25, exactly one month after the city's 5,000 residents were forced out by a massive wildfire. Deputy Mayor Alison Dallas-Funk says most critical services and businesses, including power, gas and health care, will be ready to go starting Sunday. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy She says barring further fire activity, city council will meet Monday to officially rescind the evacuation order and secure transportation for people to come home. Manitoba's wildfire service has said crews have made progress in combating the 3,700-square-kilometre fire near Flin Flon, but weather has hindered their efforts. Story continues below advertisement The province has been experiencing what Premier Wab Kinew has described as its worst fire season in recent memory, forcing upwards of 21,000 people to flee.
Reuters
14 minutes ago
- Business
- Reuters
UAE stocks bounce back amid hopes of regional de-escalation
June 20 (Reuters) - Stock exchanges in the United Arab Emirates rebounded on Friday, buoyed by hopes of a potential de-escalation in regional tensions. Investor sentiment improved following European efforts to bring Tehran back to the negotiating table and a pause in U.S. involvement in the Middle East conflict. The White House said on Thursday that President Donald Trump would decide on "whether or not to go" with U.S. involvement in the conflict in the next two weeks, citing the possibility of negotiations involving Iran in the near future. Dubai's main index (.DFMGI), opens new tab snapped a three-day losing streak, rising 1.6%, driven by gains in real estate and materials sector stocks. Among the top performers, Dubai's developer Emaar Properties ( opens new tab jumped 1.2%, while state-owned Parkin Company ( opens new tab advanced 4.8%. Separately, UAE created a new ministry of foreign trade, and appointed Thani al Zeyoudi as its minister, the United Arab Emirates prime minister and Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum said in a post on X on Friday. Abu Dhabi's benchmark index (.FTFADGI) also rebounded, gaining 1% after three consecutive sessions of losses. First Abu Dhabi Bank ( opens new tab rose 2.7%, while Adnoc Gas ( opens new tab advanced 2.5%. Real estate developer Aldar Properties ( opens new tab gained 4.5% after reporting over AED 3.5 billion in sales at its Fahid Beach Residences and The Beach House projects. Despite Friday's gains, Dubai's index posted a second consecutive weekly loss, down 0.2% after nine straight weeks of gains. Abu Dhabi mirrored the trend with a 0.5% weekly decline, according to LSEG data. Meanwhile, oil prices — a key driver of Gulf financial markets — fell 2.3% to $77.04 per barrel as of 11:40 GMT.
Newsweek
15 minutes ago
- General
- Newsweek
Dog Returned To Shelter With Brother—but More Heartbreak Was Yet To Come
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. An Illinois animal shelter has issued a desperate plea for a pit-bull mix at risk of euthanasia. A heartbreaking post from the City of Aurora, Illinois Animal Care and Control shared the story of Crong, a dog whose anxiety has spiraled since he was returned to the shelter and his brother adopted without him. Shelter staff are now urgently seeking a quiet, loving home to save Crong from further decline—and euthanasia. "This post is not easy to write," began the shelter's Facebook post. "Crong was born at our shelter. Adopted as a puppy. Returned in February with his brother when their family could no longer care for them. Blue was adopted quickly. Crong was left behind." File photo: A mixed-breed dog peers through bars at a shelter. File photo: A mixed-breed dog peers through bars at a shelter. BiancaGrueneberg/Getty Images Crong's struggle with anxiety has been long-standing, making shelter life a battle. "Crong has always struggled with anxiety," the post read. "He doesn't warm up quickly. He doesn't show well. He's scared of everything in the shelter. The barking, the movement, the chaos—it's all just too much." The impact of his brother's adoption intensified his fear. Despite exhaustive efforts, including medication, enrichment opportunities and a lot of love, nothing has helped. And the toll on the staff is immense, too. Volunteers say they go home crying again and again. "This job is heartbreaking," the shelter wrote. "We don't get to save everyone. Dogs like Crong are lost to the system, not because they're broken, but because they can't survive here. Their minds shatter before their bodies ever give out." An Ideal Home A volunteer, who described in the video meeting Crong during her time at Aurora Animal Control, said he was her favorite. She recently took Crong out of the shelter for a weekend to "decompress," so the world could see how "deserving he is of love." In the clip, she said she believes a calmer environment is crucial for Crong's survival—an ideal home would be calm and predictable, with no other pets. The plea has resonated with many, including those with experience in helping anxious dogs. "Coming from someone who adopted a dog with extreme anxiety issues, it's so rewarding to watch them open up and become themselves," one person wrote in the comments. "Is it hard some days, yes of course, but it's so worth it to show them the love they deserve." In a hopeful development, one Facebook user inquired about the adoption process, asking what steps she would need to take to adopt. Then, in a heartwarming follow-up, she later commented: "Well, [Crong] met three of the four of us and it went well … so, he might have a new forever home! Thanks for posting or we never would have found him!" Newsweek reached out to the City of Aurora, IL Animal Care and Control for comment.
