Private Equity Korea » KEB

KEXIM set to sell KEB stake to Hana

Stephanie Lim — Mon, 19 Dec 2011 08:17:00 +0000

Reuters has reported that Korea’s Export-Import Bank of Korea (KEXIM) is planning to sell a $414 mn, 6.25 percent stake in Korea Exchange Bank under the same terms as U.S. private equity fund Lone Star’s 11,900 won per share sale to Hana Financial Group. A KEXIM official said that the bank would convene a board meeting on December 20 for final approval.

Eximbank to sell minor KEB stake According to Yonhap News, the state-run Export-Import Bank of Korea...
Hana finally grabs small, but significant stake in KEB After months of delay, Hana Financial Group Inc. has finally...
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Lone Star ordered to sell stake in Korea Exchange Bank

Ross Geesman — Fri, 18 Nov 2011 04:49:05 +0000

South Korea’s financial regulator Friday November 18 ordered US private equity fund Lone Star to sell its stake in Korea Exchange Bank within six months, rejecting requests from activists and opposition parties for a public sale of Lone Star’s stake.

The Financial Services Commission (FSC) said the Texas-based firm should lower its 51.02 percent holding in KEB to less than 10 percent by May 18, in a long-running case in which Lone Star’s former Seoul head was convicted of stock price manipulation.

Friday’s decision paved the way for Lone Star to exit its investment in South Korea and expedite the sale of KEB, the country’s fifth-largest lender, to Korea-based Hana Financial Group.

Lone Star agreed last year to sell its KEB stake to Hana in a deal originally assessed to be worth $4 billion, but the deal couldn’t be completed due to the court case.

The FSC ruled Friday that the fund was unfit to be the major shareholder in KEB after an appeals court last month fined it $20.9 million and jailed its former Seoul chief for stock price manipulation, overturning a 2008 acquittal.

Lone Star bought a controlling stake in KEB for $1.2 billion in 2003 and a year later merged it with KEB’s then-listed credit card unit.

Regulators to give Lone Star orders on Oct. 25 Bloomberg has reported that the South Korean Financial Services Commission...
FSC could mandate Lone Star to sell KEB shares The Korea Herald reported that Lone Star Funds could be...
Seoul High Court to rule on Lone Star October 6 Reuters has reported that the Seoul High Court Judge Cho...

Hynix shareholders extend bid deadline to Nov. 10

Stephanie Lim — Wed, 26 Oct 2011 06:16:21 +0000

Reuters had reported that the shareholders of Hynix Semiconductor have again extended the deadline for bids for the 3.2 trillion won ($2.8 billion) stake sale. The creditors-turned-shareholders have pushed the deadline to November 10 in hopes to attract another bidder to compete with SK Telecom.

Lead shareholder Korea Exchange Bank said in a statement that it still aims to close the deal by January 2012.

Hynix Creditors extend bid deadline Since STX pulled out of the bidding for Hynix Semiconductor...
Hynix shareholders continuing sale, allowing new bidders According to Reuters, despite the fact that there is only...
Hana moves to extend deadline for KEB buyout The Korea Herald has reported that Hana Financial Group will...

Regulators to give Lone Star orders on Oct. 25

Stephanie Lim — Tue, 18 Oct 2011 08:49:43 +0000

Bloomberg has reported that the South Korean Financial Services Commission (FSC) plans to issue Lone Star Funds an order on October 25, giving the private equity fund a chance to either meet the requirements to hold its stake in Korea Exchange Bank (KEB) or sell its shares.

On October 6, the Seoul High Court found the U.S. fund guilty of stock-price manipulation, disqualifying Lone Star as a major holder of KEB shares. The fund was fined 25 billion won and its former local chief, Paul Yoo, was sentenced to 3 years in prison. Yoo filed an appeal on October 10, but Lone Star did not challenge the court’s conviction.

Due to local banking laws, it is highly unlikely that Lone Star will be able to meet the requirements to hold a majority stake in KEB. Local legislation stipulates that for a fund to invest in a banking entity, the fund must be classified as dedicated to the financial sector.

This, and the fact that the largest legal hurdles have been cleared away, suggests that the buyout firm is closer than ever to closing its proposed 4.4 trillion won ($3.8 billion) sale of its 51 percent stake in KEB to Hana Financial Group.

Seoul High Court gives verdict on Lone Star

Stephanie Lim — Thu, 06 Oct 2011 09:47:35 +0000

Maeil Business News has reported that the Seoul High Court has found Lone Star Funds guilty of stock price manipulation of Korea Exchange Bank (KEB). Paul Yoo, the former head of Lone Star Korea, has been sentenced with a three-year prison term and Lone Star Funds has been fined 25 billion won.

This verdict makes Lone Star unfit to be a majority shareholder of KEB and the Financial Services Commission (FSC) is likely to order the Texan fund to sell off at least a 41.02 percent stake of KEB. FSC officials told reporters that the method of stake disposal will be decided after a legal review and discussion amongst committee members.

According to Reuters, legal representatives for Lone Star were not available to comment on whether or not the private equity firm plans to appeal the decision.

Seoul High Court to rule on Lone Star October 6 Reuters has reported that the Seoul High Court Judge Cho...
Hana resolute to continue talks with Lone Star Bloomberg has reported that last week, Hana Financial Group’s stocks...
Lone Star gets big KEB dividend An article in JoongAng Daily reported that Korea Exchange Bank...

Hynix shareholders continuing sale, allowing new bidders

Stephanie Lim — Wed, 21 Sep 2011 05:34:32 +0000

According to Reuters, despite the fact that there is only one remaining bidder, the shareholders of Hynix Semiconductor said on September 20 that they will be proceeding with the schedule for the 3.2 trillion won ($2.8 billion) stake sale as planned.

On September 21, the shareholders announced that they will be allowing new bidders to join the sale. Reuters reported that lead shareholder Korea Exchange Bank (KEB) said in a statement that “the shareholder committee plans to expand opportunities for additional hopefuls.” Marketwatch quoted KEB attributing this decision to the shareholders’ desire to make the sale process “more transparent and fair.”

Whether or not the sale receives more bids, the shareholders intend to close the bidding on October 24 and select a preferred bidder by the end of the month. New bidders will not be given extra time to perform due diligence.

STX pulls out of Hynix sale After seven weeks of due diligence, STX Group announced on...
Bidders begin Hynix due diligence Two prospective buyers of South Korea’s Hynix Semiconductor Inc. launched...
Hynix creditors add requirement to sale structure According to Maeil Business News, the creditors of Hynix Semiconductor...

STX pulls out of Hynix sale

Stephanie Lim — Mon, 19 Sep 2011 04:41:37 +0000

After seven weeks of due diligence, STX Group announced on September 19 that it has decided to withdraw its bid to buy a 15 percent stake in Hynix Semiconductor, citing global uncertainties and the burden of future investments needed to raise competitiveness. This leaves SK Telecom as the sole bidder for the world’s No. 2 memory chipmaker, as the need for continued investments would make the acquisition an encumbrance to STX, despite its consortium with Abu Dhabi’s Aabar Investments.

Earlier this month, Hynix shareholders, led by Korea Exchange Bank, decided to increase the sale to a 20 percent stake that includes 101.85 million new shares and 44.25 million existing shares. According to Bloomberg, the 146.1 million shares for sale are valued at 3.1 trillion won ($2.7 billion) based on Hynix’s latest closing price.

The shareholders had planned to receive bids by October 24 and select a preferred bidder by the end of October; however, industry analysts have said that the reduced competition could cause the sale to fall through. SKT would like the sale to continue, but a private sale to SKT could raise concerns that chaebol are over-expanding, a practice that led to the late 90s financial crisis.

Hynix’s main shareholders, who have failed to sell their stake three times since 2009, said they will discuss how to proceed.

Analysts optimistic as creditors announce 3rd Hynix sale Reuters has reported that the creditors of Hynix Semiconductor, including...
Aabar joins STX in Hynix bid According to Reuters, Abu Dhabi state-owned fund Aabar Investments has...
Creditors revive sale of key Hynix stake According to JoongAng Daily, creditors of Hynix Semiconductor Inc. will...

Seoul High Court to rule on Lone Star October 6

Stephanie Lim — Fri, 09 Sep 2011 04:38:06 +0000

Reuters has reported that the Seoul High Court Judge Cho Kyung-ran said on September 8 that the court will give its final ruling on the stock price manipulation charges against Lone Star Funds on October 6.

In November last year, Hana Financial Group said it will acquire Lone Star’s 51% stake in Korea Exchange Bank (KEB) for 4.7 trillion won ($4.4 billion). However, regulatory approval for the deal has been delayed as Lone Star is fighting charges that it manipulated the stock price of the then-listed credit card unit of KEB in 2003.

If the court pronounces Lone Star guilty, the U.S. buyout fund will be considered as an ineligible stakeholder of KEB, and the financial watchdog can order it to sell out 47 percent of its 51.02 percent stake within six months. The shares could be transferred to Hana Financial in the process, given the fact there is no designated rule on the means of disposal.

This July, Lone Star and Hana Financial reached an agreement to extend the deal deadline to buy Lone Star’s KEB stake at a reduced price of $4.17 billion to November 30. The deal will remain in effect after the deadline as long as neither party terminates the existing contract.

Courts may rule on Lone Star-KEB as early as September Local news media JoongAng Daily has reported that the Seoul...
Hana resolute to continue talks with Lone Star Bloomberg has reported that last week, Hana Financial Group’s stocks...
Hana-Lone Star’s KEB deal to get 6 month extension Several sources have reported that Hana Financial Group Inc. said...

Courts may rule on Lone Star-KEB as early as September

Stephanie Lim — Mon, 22 Aug 2011 02:05:14 +0000

Local news media JoongAng Daily has reported that the Seoul High Court is scheduled to hold a final trial on the Lone Star-Korea Exchange Bank (KEB) case on September 8. Courts take anywhere from two weeks to one month to deliberate, and a decision will be announced as early as the end of September or by early October at the latest.

In November 2010, Hana Financial signed a 4.41 trillion won ($4.07 billion) deal with U.S. private equity firm Lone Star Funds to buy a 51.02 percent stake in KEB, the country’s fifth-largest lender by assets. However, the sale has been at an impasse since the country’s financial regulator indefinitely deferred the deal due to a lawsuit over Lone Star’s alleged wrongdoing in its 2003 purchase of a credit card unit affiliated with KEB.

This September, the financial regulator will look into if Lone Star was an eligible buyer of KEB. If the court pronounces Lone Star as an ineligible stakeholder, the financial watchdog can order the U.S. buyout fund to sell out 47 percent of its 51.02 percent stake within six months. The shares could be transferred to Hana Financial in the process, given the fact there is no designated rule on the means of disposal.

It is largely expected that the Lone Star official engaged in the case will be pronounced guilty, allowing Hana Financial a better chance to acquire KEB. However, the deal could be stalled again if the Lone Star official does not come to trial or requests a constitutional review on the court decision.

Last month, Hana Financial and Lone Star agreed to extend the deadline for the KEB sale. The two sides agreed to extend the deal by six months to November 30 and lower the price to 4.41 trillion won from 4.96 trillion won. The extended deal will remain valid past the deadline unless it is cancelled by one of the parties.

Woori sale set to fall through due to lack of bids

Stephanie Lim — Thu, 18 Aug 2011 01:05:16 +0000

Various news sources have reported that by the August 17 deadline, only one bid had been submitted for the purchase of the government-owned Woori Financial Holdings. The bidder, MBK Partners, submitted an undisclosed amount for a 30 percent stake.

According to Reuters, the financial regulators in charge of the privatization stated on August 17 that the decision to continue or abandon the sale will be made on Friday, August 19. Financial experts suspect the deal will fall through, making this the second failed attempt to find a private owner for the country’s biggest banking group by assets, with last year’s attempt also failing to draw sufficient interest.

Though government officials, spurred on by President Lee Myung Bak, have been aiming to privatize companies that were bailed out more than a decade ago, the second attempted Woori sale received only one bidder due to the recent steep declines in world markets and public criticism of the role of private equity funds.

According to the Wall Street Journal, the two other private equity firms that had been expected to bid, Vogo Fund and TStone Corp., said separately that they didn’t do so because of deteriorating capital-market conditions.

Politicians have also said that selling to a consortium led by a private-equity fund won’t help develop the local financial industry. Critics say Woori Finance would just be put up for sale again in a few years as the goal of a private-equity fund is to make a profit.

Private equity firms have also been reluctant to participate in the sale, for fear of hold-up situations like those of Texas-based Lone Star Funds. Lone Star has been trying to sell Korea Exchange Bank for years, but has been dogged by lawsuits and by public hostility toward foreign private equity funds that bought Korean assets cheaply in the wake of the 1998 financial crisis.

Thus, the sale is likely to be scrapped once again, as regulators want to see offers from more than two bidders to show South Korean voters that the government had sought to get value for taxpayer money.

Woori shares recently rebounded from an almost a two-year low as world stock markets slumped, and on August 17 its shares rose 1.3 percent to 12,100 won ($11.30)outperforming a 0.68 percent rally on the wider KOSPI index.

Goldman may join MBK consortium in Woori bid According to Reuters, there is “an 80 or 90 percent...
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Goldman and CPP join MBK for Woori bid According to Reuters, MBK Partners has completed fundraising for their...