Kyobo Life Insurance, South Korea's third-largest life insurance firm, denied rumors on March 7 that Chairman Shin Chang-jae is considering selling off stakes held by him and financial investors to a Korean banking group, calling it a possible breach of trust.
“The stake sell-off rumors are totally unrealistic, because a company official’s negotiations with banking groups are potentially a breach of trust,” the insurer said in a statement.
According to news reports, Kyobo Life representatives have been in talks with KB Financial Group and Hana Financial Group to transfer stakes owned by Shin and return-seeking foreign shareholders, including Affinity Equity Partners and Corsair Capital, discarding plans for an initial public offering valued at up to 7 trillion won (US$6.21 billion).
The news came amid the current negotiations regarding financial investors’ put-option on Kyobo Life shares. Under the shareholders’ agreement sealed in 2012, investors holding a combined 24 percent stake can force Shin to buy their shares, in case the firm fails to be listed on the stock market by September 2015.
Pressure from the financial investors escalated as Kyobo Life suffered a series of delays in IPO, which thwarted the exit of investors. Foreign shareholders reportedly considered taking the case to the Korean Commercial Arbitration Board in February, months after Kyobo Life’s board of directors in December decided to go public this year. Kyobo Life has selected five IPO underwriters: Credit Suisse Korea, Citigroup Global Market Securities Korea, JP Morgan’s Seoul office, Mirae Asset Daewoo and NH Investment & Securities.
The negotiations surrounding the put-option exercise between Shin and financial investors are ongoing, involving legal representatives.
Founded in 1958, Kyobo Life is the oldest insurer in Korea, now owning subsidiaries including Kyobo Bookstore and Kyobo Securities, among others.
By Son Ji-hyoung (email@example.com)