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INVESTMENT BANKING | Tony Chua, Korea
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Lone Star close to recover $1.84bln KEB investment

KEB’s interim dividend payment could mean that planned sale of lender would be postponed.

Lone Star, the U.S. equity fund, is close to recovering its initial 2.15 trillion won ($1.84 billion) investment in Korea Exchange Bank after the bank decided on Wednesday to make an interim dividend payment to shareholders.

With the 64.6 billion won ($55.43 million) dividend pay-out, it is estimated that Lone Star has recouped 97 percent of its investment.

This is the first time that KEB has made an interim dividend payment, which led analysts to suggest that Lone Star believes that its planned sale of the bank may not take place in the short-term.

Lone Star earlier this year sought bids for its controlling 51 percent stake, but has reportedly failed to find any buyers in spite of previous expressions of interest by ANZ Bank and MBK Partners, a local private equity fund.

Lone Star had previously failed to sell KEB over the last four years due to regulatory issues. But the planned sale of Woori Financial Group has overshadowed the sales process this time.

The interim dividend payment came as the bank reported that net profits had fallen by 11 percent on-year in the second quarter on increased loan loss provisions.

View the full story in JoongAng Daily.

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