China-based Fosun International IS reportedly one of the latest suitors to have submitted a bid to acquire nearly 20.96% equity stake, representing 12.5 million shares in LIG Insurance Co, with a potential value of $330m.
In November 2013, media sources reported that the Seoul-based LIG Group was considering divesting all shares of its nonlife insurance division, as part of its strategy to gather the required funds to compensate investors for losses from a financial fraud scandal in 2011.
If the planned move by Fosun International materialises, it will enable the company to realize its ambition to expand its insurance business on global scale, as reported by The Wall Street Journal.
An LIG spokesman was quoted by the news agency as saying that many other South Korean companies including Tongyang Life, Lotte Group and KB Financial Group have also sumitted their bids for the stake in LIG.
The deal is expected to be concluded in the coming weeks, a LIG spokesman told the publication.
The decision by LIG Group to offload stake follows a court directive, whereby the company was ordered to recompense investors for issuing fraudulent corporate papers (CP) worth approximately KRW215bn ($203m).
According to an estimate, nearly 700 investors sustained losses as the chairman and LIG Nex1 vice chairman Koo Bon-sang issued the fraudulent CPs that were due in 2011.
In its effort to grow a global insurance business, Fosun by paying €1.038bn acquired an 80% share holding in Portuguese Insurance Group, in May 2014.
LIG Insurance, whose capital assets are estimated at KRW18trn ($17bn), has been the flagship unit of the group and is the country's fourth largest non-life insurance firm.
Source IBR
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