RETAIL BANKING | Tony Chua, Korea

Korea Eximbank to divest KEB stake

The sale to Hana of its 6.25% stake in KEB will earn KEXIM about $209.1mn in net profit.

South Korea's Export-Import Bank of Korea will exercise its right to sell a 6.25-percent stake in Korea Exchange Bank (KEB) on the same terms as U.S. private equity fund Lone Star's $4.1 billion sale to Hana Financial Group, a KEXIM official said on Saturday.

Under the so-called 'tag-along' right, KEXIM can ask Hana to buy its KEB stake, meaning Hana will pay additional around 540 billion won ($513.3 million) for control of KEB.

"The board, at a meeting held on Friday, agreed to use the right," the KEXIM official said, speaking on condition of anonymity. "I cannot go further as the decision has not yet been made public."

The sell-off will earn KEXIM about 220 billion won ($209.1 million) in net profit, South Korean news agency Yonhap said.

KEXIM has the right to sell its minor stake in KEB at the same terms and conditions offered to U.S.-based Lone Star Funds, KEB's largest shareholder. Lone Star wants to sell its majority stake to Hana Financial Group.

Hana's buyout could be the country's biggest banking acquisition, but has been hit by delays after charges that it manipulated stock prices.

View the full story in Reuters.

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