이 기사는 2021년 11월 19일 08:02 thebell 에 표출된 기사입니다.

Kyobo Life Insurance has decided to restart preparations for an initial public offering as the South Korean insurer seeks to deescalate the dispute with its financial investors.

The decision was made by the company’s board of directors on Tuesday, according to industry sources. Kyobo Life plans to file an IPO application next month, with a target of listing in the first half of 2022.

Kyobo Life said the recent rise in market interest rates has helped create better conditions for insurers to raise funds. However, most of life insurance companies listed in Seoul have seen their stock prices decline in recent years, largely due to a negative industry outlook and tightened regulations.

Shares in Samsung Life Insurance, the country’s number one life insurer, recently traded at around 65,000 won ($55.08), compared to its 110,000 won IPO price in May 2010. The stock prices of Hanwha Life Insurance, Tongyang Life Insurance and Mirae Asset Life Insurance have all been halved from their IPO prices.

The price-to-book (P/B) ratio is commonly used to value life insurance companies. The average P/B ratio for South Korean life insurers is around 0.3 as of November 2021, with 0.31 for Samsung Life, 0.22 for Hanwha Life, 0.36 for Tongyang Life and 0.34 for Mirae Asset Life.

Kyobo Life’s valuation is estimated at between 3 trillion won and 4 trillion won based on the average P/B ratio of 0.3 and the company’s shareholders equity of 12.27 trillion won at the end of September 2021.

This valuation significantly falls short of expectations of a consortium led by Affinity Equity Partners, which together own 24% of the insurer.

Kyobo Life’s valuation was estimated at up to 7 trillion won when the company prepared for an IPO in 2015. The investor group also exercised put options included in the shareholder agreement in 2018 to sell their stakes to Kyobo Life’s chief executive Shin Chang-jae at 409,000 won per share, which would value the company at more than 8 trillion won.

This is a reason why many observers expect Kyobo Life is unlikely to expedite the IPO and believe that the insurer decided to resume the IPO process in order to show its willingness to help the investors exit their investment in the company as a legal battle between the two sides intensifies.

It is said that Lee Chul-joo, an outside director representing the Affinity-led consortium, also attended the board meeting on Tuesday.

A Seoul court is expected to release a ruling on the case against officials from the investor group and accountants at Deloitte Anjin, who were indicted earlier this year for allegedly mispricing shares subject to the put options, before the end of this year. (Reporting by Eun-sol Lee)