[Edaily Marketin Reporter LEE GEON-EOM ] It has been confirmed that Hyunseong Techno, the parent company of Hyunseong Autotech—a former Tier 1 supplier to KIA CORPORATION(000270) —has received a decision from the Seoul Bankruptcy Court to terminate its reorganization proceedings. This is seen as an indication that the mid-sized company, which once led the regional automotive parts industry, has failed to return to normal operations through mergers and acquisitions (M&A). Attention is now focused on future proceedings, as it has been reported that creditors plan to secure management control and reapply for reorganization.

According to legal and investment banking (IB) sources on the 29th, the 11th Division of the Seoul Rehabilitation Court terminated Hyunseong Techno’s rehabilitation proceedings on the 13th of last month. This was because the rehabilitation plan was rejected at a meeting of interested parties convened to vote on the resolution. A meeting of interested parties is a gathering where creditors and other stakeholders review and vote on the rehabilitation plan.

Previously, Hyunsung Techno’s reorganization proceedings, which had been underway at the Gwangju District Court, concluded in June of last year. Subsequently, the company reapplied for reorganization proceedings at the Seoul Bankruptcy Court on the premise of a third-party sale. The Seoul Bankruptcy Court issued an order to commence proceedings on October 2 of last year, and the CEO was appointed as the administrator. However, as the company ultimately failed to secure the consent of the creditor group and other stakeholders, the proceedings were terminated after approximately 10 months.

A lawsuit seeking the transfer of share ownership is cited as a key factor that will determine Hyunsung Techno’s future. This lawsuit, currently pending before the Gwangju District Court, concluded its oral arguments on the 10th and is scheduled for a first-instance ruling on the 22nd of next month. The plaintiffs are creditors who lent funds to the company prior to the rehabilitation proceedings. They are demanding a change in the names on the shareholder registry, claiming they had agreed to receive the shares held by the CEO.

Previously, when the company filed for rehabilitation, some creditors submitted a motion to the court requesting that the application be dismissed, arguing that it was not in the best interests of the creditors as a whole.

It is understood that Hyunseong Techno has not yet entered bankruptcy proceedings following the termination of its reorganization proceedings. It is reported that the creditors plan to appoint new management based on their shareholder status and reapply for reorganization as soon as the lawsuit is concluded. This is interpreted as an effort to simultaneously recover debts and secure management control.

Attempts by its subsidiary, Hyunseong Autotech, to file for reorganization have also repeatedly failed. On July 24, the First Bankruptcy Division of the Gwangju Reorganization Court dismissed Hyunseong Autotech’s petition to commence reorganization proceedings. This was a renewed application filed just five days after the Seoul Reorganization Court’s previous dismissal decision became final. The court ruled that the petition was not made in good faith or was not in the best interests of the creditors as a whole.

This marks Hyunseong Autotech’s fourth attempt to file for rehabilitation. The company first filed a petition with the Gwangju District Court in March 2024 but later withdrew it. Petitions filed with the Seoul Rehabilitation Court in September of that year and November of last year were both dismissed. The third petition was also dismissed on appeal by the Seoul High Court, and the decision became final last July.

Meanwhile, Hyunseong Autotech, established in 1989, is a company specializing in automotive body parts and was a Tier 1 supplier to KIA CORPORATION’s Gwangju plant. It played a significant role in the local economy, having been included among the 36 “Premium Small and Medium Enterprises” selected by Gwangju Metropolitan City. In 2022, its revenue reached 59.6 billion won, placing it in the middle to upper range among companies in the Gwangju region.