South Korea's Woongjin Holdings Co has opted to team up with a local private equity fund to buy a 31 percent stake in water purifier maker Woongjin Coway Co Ltd that the parent company put up for sale earlier this year.

KTB Investment & Securities said on Tuesday its affiliate KTB Private Equity would form a special purpose company with Woongjin Holdings to buy the stake, which was worth 758 billion won ($661 million) at Tuesday's market close.

About 1.2 trillion won in capital was expected to be funneled into the special purpose company, of which half would be debt, a KTB spokesman said.

KTB would contribute 60 percent of the remaining 600 billion won as a financial investor, while Woongjin Group would contribute the remaining 40 percent and retain management control of Woongjin Coway.

Woongjin Group will also have preemptive buying rights to KTB's stake should KTB decide to sell its holdings in 2016.

The deal was one of the few South Korean stake sales expected to reach or exceed 1 trillion won in value this year.

Woongjin Holdings flagged its interest in selling the Coway stake in February, saying the cash from a sale would help fund the group's move into the solar energy business.

The stake in Woongjin Coway had attracted interest from GS Retail and private equity fund MBK Partners.

Goldman Sachs had been appointed to manage the sale. ($1 = 1146.6500 Korean won)

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