Interpark is sounding out possible buyers for its majority stake in wholesale book distribution unit Interpark Songin Books only three years after it acquired the company, and having failed to turn the loss-making business around.

Prospective bidders, including strategic investors and financial investors, are being contacted through a domestic accounting firm, investment banking industry sources said on Wednesday (May 27). Interpark holds a 74 percent stake in Interpark Songin Books.

Established in 1959 as Songin Books, the company has become the second largest wholesale book distributor in the country, dealing with approximately 2000 publishing firms. It went bankrupt in 2017 after failing to pay promissory notes and was purchased by Interpark in December that year while undergoing a rehabilitation process.

Interpark initially acquired a 55 percent stake for five billion won ($4 million) and injected an additional five billion won with an expectation that it would create synergies with the firm’s existing online bookstore unit. This helped Songin Books normalize its business and continue operations.

However, the company has remained in the red, recording operating losses of 4.7 billion won ($3.8 million) and 2.1 billion won ($1.7 billion) respectively in 2017 and 2018. It posted an operating loss of 1.3 billion won ($1 billion) last year.

Sales amounted to 5.6 billion won ($4.5 million) in 2017, dropped to 2.5 billion won ($2.1 million) in 2018 and bounced back to four billion won ($3.2 million) last year, indicating that Interpark’s investment has not yet borne fruit.

Woonjin, another player in the same industry, recently sold its 72 percent stake in Booxen, the country’s number one book distribution company with a 65 percent market share, to Centroid Investment Partners for 49.3 billion won ($39.8 million). Interpark Songin Books has a market share of approximately 20 percent.

Market analysts say it is not certain Interpark will find a buyer. Competitors that can create synergies through the company may have some interest, but it is not clear if they will join the race. If Interpark can complete a sale, a slew of mergers and acquisitions led by the Booxen deal may shake up the domestic book distribution industry. (Reporting by Hye-ran Kim)