Woori Financial Group Welcomes Fubon Life Insurance of Taiwan as Strategic Investor
Woori Bank sells 4 pct stake in parent financial group for $300 million to Taiwanese life insurer to let the company become 4th largest shareholder in one of Korea’s largest financial conglomerates
Chairman Sohn Tae-seung of Woori Financial Group.
Woori Bank, a major South Korean commercial lender, sold a 4 percent stake in its parent Woori Financial Group Inc. to a strategic investor. The bank acquired a 5.8 percent stake in Woori Financial earlier this month in exchange for handing over its stake in Woori Card to the parent company.
Woori Financial announced on Sept. 25 that its commercial banking subsidiary Woori Bank sold a 4 percent stake in it to Fubon Life Insurance, the insurance unit of Taiwan's Fubon Financial Holding, through a block deal before the stock market opened on Sept. 26.
Taiwan’s Fubon Life Insurance Co. agreed to buy 4 percent in Woori Financial Group to pose as the fourth largest shareholder in one of the largest financial conglomerates in Korea for around $300 million, helping the stock price weighed down by supply concerns.
Woori Financial Group announced in a regulatory filing on Sept. 25 that its subsidiary Woori Bank sold off a 4 percent stake or 28,890,707 shares worth 358.5 billion won ($299 million) at 12,408 won apiece in an off-hour block trade before the opening of the market on Thursday.
The shares were given to Woori Bank from the parent that was launched at the beginning of the year in return for its handover of interests in credit card and merchant banking unit to place them under one parent.
Woori Bank has assumed 5.86 percent in the newly-launched parent, which it must divest within six months under domestic law that prevents a bank from holding stake in a holding company.
Goldman Sachs, its underwriter, has been in talks with the Taiwanese insurer in hopes to sell the entire holdings, but settled with 4 percent as its voting right cannot go beyond that threshold under domestic regulations.
The bank is still working to sell 1.8 percent to strategic investors as not to burden the market and stock price. It has arranged an IR tour in the Middle East and the United States next month. Woori Financial shares were helped upon the news of the block sale.
Fubon Life Insurance, owned by Fubon Holding Group, will not appoint an outside director at the board of Woori Financial as an oligopolistic shareholder.
There are five directors from its oligopolistic stakeholders including IMM PE, Korea Investment Securities and Hanwha Life Insurance, and one independent director from Korea Deposit Insurance Corp. at Woori Financial board. The shares were sold through the process of privatizing Woori Bank, nationalized amidst the breakdown of the Korean financial sector following the 1997-1998 financial crisis.
A Woori Financial official said, “With the latest deal, we can now attract foreign long-term investors.
Woori Financial, which was officially launched this year, has won investors’ trust by improving business performance and raised expectations for a further rise in corporate value as it can expand its business in the non-banking sector in the future.” Woori Bank will also focus on selling the remaining 1.8 percent stake in Woori Financial.
The bank has to sell it by early March next year. Woori Financial is seeking ways to draw investment from sovereign wealth funds in Middle East and is planning to hold an IR for medium and long-term investors in Europe and North America in October.
Based on these, the group hopes to sell the remaining stake as soon as possible.
A view of the building in downtown Seoul where Woori Financial Group and its affiliates have offices. (Photos WFG)