South Korea’s AJ Group has accelerated its transition to future mobility services from car rental operator and is set to take over the country’s top motorbike maker Daelim Motorcycle Co. together with private funds.

AJ Group in a consortium with A2 Partners and Rhinos Asset Management will sign a contract on purchasing Daelim Motorcycle shares in mid-July, according to industry sources on Sunday. Up for purchase is a full stake in Daelim Motorcycle owned by Daelim Industrial Co. and Affirma Capital. The deal has been made directly without a third-party financial advisor.

The consortium will form a 600 billion won ($50 million) project fund to buy Daelim Motorcycle. The fund will also acquire AJ Bike from AJ M, the holding entity of AJ Group’s mobility business. Institutional investors will contribute about 400 billion won in the fund as senior investors, while AJ Group as a strategic and subordinate investor will finance 20 billion won and hold a right of first refusal that will allow the group to have the right, but not obligation, to take over Daelim Motorcycle and AJ Bike before other parties.

The consortium pins hopes on synergy after Daelim Motorcycle and AJ Bike come under one roof to groom it like Gogoro, the fast-growing Taiwanese e-scooter developer and manufacturer with a vast network of battery-swapping stations.

Daelim Motorcycle is the country’s largest motorbike maker that has been seeking to expand the eco-friendly two-wheel mobility market ecosystem. The company has made inroads in the electric motorbike market by launching electric scooters via local big-box store chain Homeplus.

AJ Bike is the country’s No. 1 motorcycle rental company. It also is moving aggressively to develop electric motorcycles, especially battery-swapping electric scooters.

AJ Group reportedly aims to shift towards becoming a comprehensive mobility company, which makes motorbikes as well as offer future mobility services such as delivery with its green two-wheel vehicles.

The group has been actively reorganizing its businesses in recent years by shifting away from the broad car rental market. In early 2019, it sold its car rental unit AJ Rent-A-Car to SK Networks. It secured about 200 billion won in cash from the sale and used most of it as investment in new businesses.

It also has taken over a residential property management company and fried chicken restaurant franchise for synergy with existing businesses, while selling off non-core assets, including real estate properties held through AJ Total. Recently, it launched a process to sell used car sale platform AJ Sellcar.

By Kang Woo-seok and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]