Hyundai Card Co., South Korea’s leading card issuer, will name a lead manager for its initial public offering next month to be ready to go public when market conditions are right, sources said Thursday.

Hyundai Card will be receiving bids from candidates with an aim to form IPO underwriters next month. The company will be watching market conditions to decide the timing of its IPO, the sources said.

The IPO of the consumer credit card unit under Korea’s automobile conglomerate Hyundai Motor Group is aimed to enhance management transparency and also enable its financial investors to redeem their investments.

Hyundai Motor took over Diners Club Korea and renamed it as Hyundai Card in 2001.

Hyundai Motor Group affiliates own a combined 72.98 percent stake in Hyundai Card with Hyundai Motor 36.96 percent, Kia Motors 11.48 percent, and Hyundai Commercial 24.54 percent. Other financial investors in a consortium led by Affinity Equity Partners hold 24 percent stake together – Affinity Equity Partners (9.99 percent), Government of Singapore Investment (9.00 percent), and AlpInvest Partners (5.01 percent).

These financial investors took over 24 percent out of the 43 percent stake in Hyundai Card held by GE Capital at 376.6 billion won ($317.3 million) in 2017, while Hyundai Commercial purchased the remaining 19 percent for 298.1 billion won. GE Capital severed its partnership with Hyundai Card by disposing all stakes at that time.

Financial investors generally seek to cash out in on their investment within four to five years after their investment.

The enterprise valuation of Hyundai Card is estimated at 2.5 trillion won but could go higher, according to market experts, considering that the financial investors estimated the value of Hyundai Card at 1.6 trillion won when they invested in the company two years ago.

By Pulse (Translation)

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