A local private equity fund operator J&W Partners Ltd. has been cleared to take over SK Securities Co., brokerage unit of South Korea’s third largest conglomerate SK Group put for sale in compliance with the antitrust law.

The top decision-making Securities and Futures Commission of the Financial Services Commission gave the green light to J&W Partners’ bid over SK Securities on Wednesday.

The final approval will be made at the plenary FSC meeting on July 25.

Shares of SK Securities surged 17.12 percent to close Thursday at 1,300 won, while those of SK Holdings fell 0.19 percent to 268,500 won.

The price for a 10.04 percent stake has been set at 51.5 billion won ($45.6 million), about 15 percent below the bid of 60.8 billion won from a consortium led by Cape Investment & Securities in August 2017, a deal that fell through, in reflection of deterioration in the brokerage house’s performance.

SK Securities raised 6.4 billion won in net profit in the January to March period this year, down 32.6 percent from the same period a year ago.

Upon winning the final nod from the FSC, J&W Partners would have to issue new shares to bump up its equity holding from 10 percent to more than 30 percent for management control, which would require additional investment of around 300 billion won.

SK Holdings Co., the holding entity of SK Group, has been under pressure to unload its 10 percent stake in the brokerage unit ever since the group adopted the holding company structure in 2015 under the Korean law that bans a holding entity owning equity interest in a financial company. SK paid a fine of 2.96 billion won because it missed the Aug. 2 2017 deadline.

Founded in 1955, SK Securities came under the SK Group in 1992.

By Jin Young-tae and Choi Mira

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