Private equity (PE) firm Ace Equity Partners will recapitalize South Korean semiconductor testing service company Tesna, one year after its acquisition by the company.

Ace Equity Partners is in talks with multiple financial services firms on the deal, including Shinhan Bank – which originally arranged the acquisition financing – Kiwoom Securities, Korea Development Bank and Daegu Bank, industry sources reported.

The debt, which originally bore interest in a mid-to-high 4% range, will be refinanced with a new loan at lower rates. The amount involved is expected to increase to about 135 billion won ($121 million) including revolving credit facilities, from an initial 80 billion won.

Tesna’s positive financial performance and the rise in its stock price is likely to help with a smooth completion of the deal. Founded in 2002, Tesna’s revenue recorded 93.6 billion won in the third quarter on a consolidated basis, up 32.6% compared to a year ago. Its operating income and net income have both grown by about 19% during the same period.

The stock price of Tesna has almost doubled from a 20,000 won-level when Ace Equity Partners made its investment, to 42,250 won on November 19, enabling the PE firm to make partial exits through a block deal and recapitalization.

Ace Equity Partners acquired bonds with warrant and convertible preference shares issued by Tesna through Ai Tree Limited, a 200 billion won project fund formed in October 2019.

The PE firm sold 1.2 million shares of Tesna via the block deal earlier this month, but Ai Tree Limited remains the largest shareholder of the company. (Reporting by Ar-rum Rho)