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Six to Seven Domestic and Foreign Companies Intend to Acquire LG Card

Six to Seven Domestic and Foreign Companies Intend to Acquire LG Card

Posted January. 02, 2005 22:35,   


It was confirmed that as creditors of LG Group and LG Card are holding negotiations concerning an increase in capital, six to seven finance companies have displayed their intentions to acquire LG Card.

Accordingly, it is anticipated that the negotiations by the creditors and acquisition candidates to find the new owner of LG Card will start in earnest early this year.

A high-ranking officer of the Industrial Bank, which is currently in charge of the management of LG Card, communicated, “As the negotiations concerning an increase in capital have met obstacles, six to seven finance companies have proposed that they would ‘purchase at a low price,’ but all of them were rejected.”

Currently, the companies considering the acquisition of LG Card are domestic companies such as Woori Financial Group, National Agricultural Cooperative Federation (NACF) and Hana Bank, and foreign companies such as Citigroup and the British bank HSBC.

This officer said, “If a favorable proposal is made, we will negotiate with any one of the companies at any time” and that, “as the normalization of management is certain, due to an increase in capital, we will ask for an adequate price.”

However, when LG Group (individual major stockholders and affiliates included) converts loans of 500 billion won to capital, it will become a major stockholder of LG Card.

Financial circles are anticipating the price of new stocks to be 11,100 won per share. In this case, LG Card expects LG Group’s equity shares to increase by 6.3 percent.

If the value of stocks decreases until January 25, the stock subscription date for capital increase with consideration, and the new stocks are issued at face value (5,000 won), LG Group will have 13.9 percent equity and become one of the firm’s three major stockholders alongside the Industrial Bank and NACF.

Among the 500 billion won increase in capital by the creditors, the Industrial Bank has the largest allotment with 138.6 billion won, followed by NAFC (88.4 billion won), Kookmin Bank (32.4 billion won) and the Woori Bank (23.7 billion won).

Suk-Ho Shin kyle@donga.com