Hanwha Group said Monday that it has informed a state-run deposit insurer of its decision to buy an additional stake in Korea Life Insurance Co.
According to the group, boards of its seven affiliates approved a move to buy a 16 percent stake in the country's second-largest life insurer from the Korea Deposit Insurance Corp. (KDIC) Shares of Hanwha Corp., the group's de facto holding company, lost 650 won, or 2.71 percent, to close at 23,350 won.
Under a deal signed with the KDIC in 2002, Hanwha was entitled to purchase an additional stake in Korea Life for 2,275 won (US$2.36) per share by the end of 2007.
In that year, a consortium led by the conglomerate bought a 51 percent stake in the life insurer for 1.6 trillion won. Hanwha said it has sent the KDIC a letter regarding its decision on the stake purchase.
Hanwha had been locked in a dispute with the KDIC over legality of its acquisition of Korea Life.
Earlier this month, the KDIC said it plans to ask an international court for arbitration in the dispute. The state deposit insurer claimed that Hanwha extended money to Macquarie Life, which was part of the consortium, to meet the requirement that only a life insurer or a consortium involving a life insurer was allowed to bid for the Korea Life stake.
Hanhwa Group promised to buy back the Korea Life stake from Macquarie Life one year after the purchase and to bear all costs involved in the joint purchase, according to the KDIC.
Macquarie Life was also allowed to manage one third of the assets held by Korea Life, the deposit insurer insisted.
However, on Friday the country's supreme court cleared the consortium of charges it had deceived the KDIC in the process of buying the stake in the life insurer.
The KDIC said it refuses to accept Hanhwa's exercising of its right to buy the additional stake in Korea Life.
"We cannot approve Hanwha's call-option right until we receive the result of our appeal to an international arbitration court over the group's stake purchase," a KDIC official said.
Seoul, June 19 (Yonhap)
Hanwha Group decides to purchase additional stake in Korea Life |
