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April 30, 2008
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| With Korean financial authorities showing little sign that they will give quick approval to Lone Star Funds’ sale of Korea’s sixth-largest bank to HSBC, the two firms extended the deal for three more months yesterday, a day before a self-imposed deadline. “HSBC and Lone Star have agreed to extend, until 31 July 2008, the deadline for completion of HSBC’s proposed acquisition of 51.02 percent of Korea Exchange Bank, subject to regulatory approval,” said HSBC in a statement. Earlier in the day, the head of the nation’s top financial regulator said that it still needs time before deciding whether the deal passes muster. The Financial Services Commission says there is legal uncertainty surrounding Lone Star’s purchase of Korea Exchange Bank in 2003. The $6.2 billion deal made last September between Dallas-based buyout firm Lone Star and Europe’s largest bank has been stalled due to an ongoing court case that is expected to decide whether Lone Star colluded with Korean government officials to manipulate data on KEB’s financial health in 2003 to lower its share price. The original deal allowed either party to drop the deal after April 30. FSC Chairman Jun Kwang-woo said in a meeting with foreign correspondents in Seoul that it will take a momentum for the commission to approve the transfer. A court decision is pending. Jun stressed that his remarks should not be seen as contradicting his stated preference to see a quick end to the deal. “Our government is trying to do what it can to resolve this as soon as possible, but that does not mean you can expect a solution overnight,” said Jun after a luncheon meeting in central Seoul. “What I am saying is that we do not have sufficient basis to close this file by tomorrow,” Jun said. By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr] |
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