Lone Star may be told to sell down KEB stake next month - report
South Korean regulators may order Lone Star to sell down its 51% stake in Korea Exchange Bank (KEB) to less than 10% next month. The move comes after the US private equity fund was found guilty of manipulating KEB’s stock price ahead of purchasing the group, and ordered to pay KRW25 billion ($21 million) in damages.
Sources close to the process told Reuters that regulators are in the process of completing the technical procedures that precede the official sell down order, meaning Lone Star could receive the order early November.
However, the newswire added that regulators do not have the right to dictate how Lone Star unloads its stake. This would allow the private equity firm to sell out to Hana Financial Group, which offered to purchase the stake for $4.2 billion last year. That transaction has yet to close after the government delayed the process, saying it wanted to wait for Lone Star's legal issues to be resolved.
In the aftermath of the Korean court's ruling, Hana Financial Group was said to be considering renegotiating with Lone Star to cut its acquisition price for KEB by one-fifth. It has since denied these reports, saying it had not been in contact with Lone Start regarding the sale price.
Lone Star acquired its majority 51% stake in the bank for $1.3 billion in 2003. Since then, it made several attempts at selling KEB, culminating in Hana's agreeing to buy Lone Star's interest last November. The private equity firm's previous attempts at an exit - including via auction in 2005, to Kookmin Bank for $7.3 billion in 2006, and to HSBC for $6.3 billion in 2008 - have all been blocked or stalled by regulators due to the long-running court saga. Lone Star managed to sell down part of its stake in 2007.
More on North Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.