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Share sale next year could be worth up to 2 trillion won
November 05, 2009
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| Korea Life Insurance, one of Korea’s top three life insurers, took another step toward an initial share offering worth up to 2 trillion won ($1.7 billion) on the Seoul stock market next year, selecting six brokerages here and abroad as arrangers for the sale. Company representatives yesterday announced Korea Life had selected Daewoo Securities, Woori Investment and Securities, Tong Yang Securities, Goldman Sachs, JPMorgan Chase and Deutsche Bank to arrange the share sale. The brokers’ due diligence on the company is expected to take about three months before market regulators begin preliminary screening. “Our plan is to list the shares in 2010, though we will have to look at market conditions to determine pricing and the exact timing of the share sale,” said Kim Sang-gil, Korea Life’s public relations deputy general manager. The company did not disclose the volume or value of the shares in the initial public offering, but local industry observers have speculated that shares worth about 20 to 25 percent of Korea Life, valued at up to 2 trillion won, will be offered. Kim confirmed that speculation, saying, “That estimate seems pretty close to our plan for now.” Korea Life, a subsidiary of Hanwha Group, has total assets of 43.3 trillion won and posted net profits of 83 billion won for the 2008 fiscal year. It has been vying for the No. 2 spot on the local market with Kyobo Life Insurance, behind Samsung Life Insurance, the unchallenged industry leader. Hanwha Construction owns a 31.5 percent stake in the life insurer, followed by 28.2 percent held by a chemical subsidiary simply named Hanwha and 7 percent owned by Hanwha Chemical. The state-run Korea Deposit Insurance Corp. also has a 33 percent stake in Korea Life, which was once pushed to the brink of bankruptcy in the wake of the 1997-98 Asian financial crisis. From 1999 to 2001 Korea Deposit Insurance provided nearly 4 trillion won in state-backed emergency aid to Korea Life and became a major shareholder in the insurer. Korea Deposit Insurance later sold a controlling stake in the firm to Hanwha Group, which was eager to expand its business portfolio in the financial sector in 2002. Korea Life, if it manages to go public next year, is expected to become the second or third life insurer here to list its shares, after Tong Yang Life Insurance, which went public in October. Mirae Asset Life Insurance, a subsidiary of the Mirae Asset group, is also known to be considering a public stock sale plan. By Jung Ha-won [hawon@joongang.co.kr] |
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