ID :
21785
Mon, 09/29/2008 - 10:34
Auther :
Shortlink :
http://m.oananews.org//node/21785
The shortlink copeid
S. Korea's deposit insurance agency to sell 16 pct stake in insurer to Hanwha
SEOUL, Sept. 28 (Yonhap) -- South Korea's state-run deposit insurance agency said Sunday it plans to sell its 16 percent stake in Korea Life Insurance Co. to Hanwha Group, the country's ninth-largest conglomerate.
The Korea Deposit Insurance Corp. (KDIC) said it has decided to sell 160 million
shares out of its 49 percent stake for 2,275 won (US$1.95) per stock to Hanwha as
the group exercised an option to buy the shares. The move will raise the stake
holdings of Hanwha in Korea Life to 67 percent from a current 51 percent.
The possible stake sale would make it possible for Hanwha to fetch about 1
trillion won in profit from the exercise of the option and to secure more
ammunition necessary for buying Daewoo Shipbuilding & Marine Engineering Co., the
world's third-largest shipyard which is currently up for sale, market watchers
said.
Meanwhile, KDIC, which spent 3.55 trillion won on bailing out Korea Life
Insurance in 1999, could retrieve 258.4 billion won in public funds.
The KDIC's move came as an international commercial arbitration court ruled in
favor of Hanwha Group's takeover of Korea Life Insurance, ending years of legal
wrangling over the controversial deal on Aug. 1.
In a deal with KDIC in 2002, a consortium led by Hanwha Group bought a 51-percent
stake in the nation's second-largest life insurer for 820 billion won. But KDIC
later alleged the consortium's takeover of Korea Life Insurance was not legally
binding, claiming that Hanwha Group lent money to Macquarie Life, a member of the
consortium, in a bid to meet the requirement that only a life insurer, or
consortium involving a life insurer, be allowed to bid for the Korea Life stake.
KDIC also argued the Hanwha group promised to buy back the Korea Life stake from
Macquarie Life one year after the purchase and to bear all costs involved in the
joint venture.
In June 2006, Hanwha group exercised its option to purchase an additional
16-percent stake in the life insurer after the Supreme Court cleared the
consortium of charges it had deceived KDIC in the process of buying the stake.
But KDIC rejected Hanwha's assertion it had a legitimate right to buy the
additional stake in Korea Life, taking the matter to the International Court of
Arbitration.
Last year, Hanwha Group became the largest shareholder of Korea Life after its
affiliate bought a 17-percent stake in the insurance company from Japan's Orix
Corp.
According to financial sources, Hanwha is seeking to sell a 9.9 percent stake in
Korea Life as a way to secure money to push for a takeover of Daewoo Shipbuilding
after picking JPMorgan Chase & Co. as a lead manager.
sooyeon@yna.co.kr
(END)
The Korea Deposit Insurance Corp. (KDIC) said it has decided to sell 160 million
shares out of its 49 percent stake for 2,275 won (US$1.95) per stock to Hanwha as
the group exercised an option to buy the shares. The move will raise the stake
holdings of Hanwha in Korea Life to 67 percent from a current 51 percent.
The possible stake sale would make it possible for Hanwha to fetch about 1
trillion won in profit from the exercise of the option and to secure more
ammunition necessary for buying Daewoo Shipbuilding & Marine Engineering Co., the
world's third-largest shipyard which is currently up for sale, market watchers
said.
Meanwhile, KDIC, which spent 3.55 trillion won on bailing out Korea Life
Insurance in 1999, could retrieve 258.4 billion won in public funds.
The KDIC's move came as an international commercial arbitration court ruled in
favor of Hanwha Group's takeover of Korea Life Insurance, ending years of legal
wrangling over the controversial deal on Aug. 1.
In a deal with KDIC in 2002, a consortium led by Hanwha Group bought a 51-percent
stake in the nation's second-largest life insurer for 820 billion won. But KDIC
later alleged the consortium's takeover of Korea Life Insurance was not legally
binding, claiming that Hanwha Group lent money to Macquarie Life, a member of the
consortium, in a bid to meet the requirement that only a life insurer, or
consortium involving a life insurer, be allowed to bid for the Korea Life stake.
KDIC also argued the Hanwha group promised to buy back the Korea Life stake from
Macquarie Life one year after the purchase and to bear all costs involved in the
joint venture.
In June 2006, Hanwha group exercised its option to purchase an additional
16-percent stake in the life insurer after the Supreme Court cleared the
consortium of charges it had deceived KDIC in the process of buying the stake.
But KDIC rejected Hanwha's assertion it had a legitimate right to buy the
additional stake in Korea Life, taking the matter to the International Court of
Arbitration.
Last year, Hanwha Group became the largest shareholder of Korea Life after its
affiliate bought a 17-percent stake in the insurance company from Japan's Orix
Corp.
According to financial sources, Hanwha is seeking to sell a 9.9 percent stake in
Korea Life as a way to secure money to push for a takeover of Daewoo Shipbuilding
after picking JPMorgan Chase & Co. as a lead manager.
sooyeon@yna.co.kr
(END)
