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Harim Group seeks to buy minority stake in Woori Financial The group reportedly have submitted LOI through Pan Ocean

Translated by Kim So-in 공개 2021-10-15 08:33:17

이 기사는 2021년 10월 15일 08:12 더벨 유료페이지에 표출된 기사입니다.

South Korea’s Harim Group is seeking to acquire a minority stake in Woori Financial Group through its affiliate Pan Ocean.

The Korea Deposit Insurance Corporation (KDIC) is preparing a tender to sell its stake in Woori Financial, industry sources said on Wednesday. More than 10 potential investors have reportedly submitted their letters of intent (LOIs).

Harim Group is said to have submitted its LOI through its affiliate Pan Ocean. The group responded extremely cautiously regarding the issue. Pan Ocean chief executive officer Ahn Joong-ho and the company's representative both declined to respond to requests for comment.

Harim Group has grown in size through a series of mergers and acquisitions (M&A) over the last two decades, including acquisitions of Orpum, Jeil Feed, Korea Investment, and NS Shopping.

The group’s acquisition of Pan Ocean drew the strongest attention from market insiders as it was the first time the group has ever purchased a shipping firm. Harim Group chairman Kim Hong-kuk sought to own a shipping business to more stably bring grains, animal feeds and other commodities into Korea.

Earlier this year, Harim Group participated in a sale of the country’s debt-ridden budget carrier Eastar Jet through Pan Ocean, though it later walked away from the deal.

“The group may have believed that its major affiliate Pan Ocean has to come to the fore to enhance its external credibility given various circumstances including the symbolism of becoming a shareholder of a domestic financial holding company,” said an industry source.

“Harim Group is actively reviewing new M&A deals and investments as shown in its recent participation in the Eastar Jet acquisition deal,” said an official at one private equity firm in Seoul.

Harim Group may be seeking to take over a minority stake in Woori Financial for the purpose of obtaining capital gains. The KDIC will sell up to a 10% stake in Woori Financial out of 15.13% it owns. Companies categorized as "non-financial investors" under the country's Financial Holding Companies Act are not allowed to own more than a 4% stake in a large bank.

The financial conglomerate has a lower price-to-book ratio of 0.34 times compared to its domestic rivals, with KB standing at 0.48 times, Shinhan 0.45 times, and Hana 0.4 times.

KT, Hoban Construction, eBest Investment & Securities, KTB Asset Management, Glenwood Private Equity, and Eugene Private Equity, and the bank's employee stock ownership plan are reportedly among the 18 investors that submitted LOIs on October 8. (Reporting by Gyoung-tae Kim)
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