PE-backed Tongyang Life bids for LIG Insurance

Tongyang confirmed its participation in the auction, adding that further details have yet to be determined. According to Reuters, the deal could be worth at least KRW400 billion ($373 million), with Lotte Shopping and KB Financial Group also submitting bids for the asset.

A number of shareholders in LIG Insurance are looking to sell a 21% stake in the business, including management control. The proceeds will be used to reimburse investors who lost money on commercial bonds issued by LIG Engineering & Construction, an affiliate of LIG Insurance that entered debt restructuring in 2011.

A PE consortium led by STIC Investments last year picked up a 49% stake in aerospace and defense company LIG Nex1, also as part of parent company LIG Group's efforts to service debts and refocus on core business activities.

LIG Insurance is Korea's fourth-largest property and casualty insurer after Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance and Dongbu Insurance. It has more than KRW2 billion in assets and posted a net income of KRW164.4 billion in 2012, down from KRW198.4 billion the previous year.

Vogo bought 17% of Tongyang in 2006 on the condition that it would get first refusal on any further sale. This happened in 2010 and Vogo's stake rose to 64%.

Tongyang and Vogo last year entered into exclusive negotiations with ING over the latter's Korean life insurance unit. However, the deal fell through and the asset was subsequently bought by MBK Partners for approximately KRW1.84 trillion.

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• Topics
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• North Asia
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• Vogo Investment
• South Korea