VIG Alternative Credit provides ₩50B DIP loan to Kodaco
What's the deal? VIG Alternative CreditDealroom has a profile for this one. Try Dealroom → (VAC), the credit arm of South Korean private equity firm VIG PartnersDealroom has a profile for this one. Try Dealroom →, has provided a 50 billion Korean won debtor-in-possession (DIP) loan to KodacoDealroom has a profile for this one. Try Dealroom →, an automotive aluminium parts maker undergoing court-supervised rehabilitation. Korea Investment Private Equity co-signed the deal. The loan carries a low double-digit annual interest rate, with Kodaco's Cheonan and Anseong factories pledged as collateral.
Kodaco was once a second-tier supplier for Hyundai Motor GroupDealroom has a profile for this one. Try Dealroom →, posting annual sales of 3 trillion won and operating profit of roughly 100 billion won. It entered rehabilitation in September 2023 after a botched overseas expansion — specifically a Mexican subsidiary set up to supply Kia's North American operations — was hit by US tariff policies.
Since then, the company has stabilised. Korea Development BankDealroom has a profile for this one. Try Dealroom → became its largest shareholder (22.28%) through an equity conversion, the Mexican unit was sold, and domestic operations turned profitable. In Q1 2026, Kodaco posted consolidated sales of 58.6 billion won and operating profit of 600 million won.
Why now? VAC formed a 3 trillion won blind fund at the end of last year and has deployed roughly half of it in just five months. The Kodaco deal is its third loan-format investment, following a 60 billion won convertible bond deal with proptech firm Jikbang and a 60 billion won investment in a leased dormitory operator. All three feature downside protection — a hallmark of VAC's opportunistic strategy, which targets mid-to-high-teen returns.
For Kodaco, the timing aligns with its improving fundamentals. Its core aluminium die-casting business is in a structural growth phase, driven by rising demand for electric vehicle lightweighting.
What could go wrong? Kodaco remains in rehabilitation proceedings, meaning operational and legal risks persist. The company's prior crisis was triggered by trade policy — a risk that hasn't disappeared. If rehabilitation drags on or market conditions shift, refinancing at lower rates may prove harder than expected.
DIP loans do carry preferential repayment rights over existing creditors, which provides a cushion. But the lenders are still betting on Kodaco graduating from rehabilitation smoothly enough for banks to refinance the debt at 3–4% interest rates.
The signal: VAC's rapid-fire deployment — three structured deals in five months from a ₩3 trillion blind fund — underscores how South Korea's private credit market is maturing fast, with opportunistic lenders filling the void left by banks reluctant to finance companies in rehabilitation. Kodaco's aluminium die-casting business, buoyed by structural demand for EV lightweighting, makes it a bet on both a turnaround story and a sector tailwind, but the deal's real tell is the premium pricing: low double-digit rates on a collateralised loan signal that distressed-adjacent credit in Korea still commands equity-like returns.
