BC Card Co. is returning to the debt market for the first time in 17 years with an offering of 100 billion won ($81 million) ahead of its plan to join the recapitalization scheme of K-Bank to command the largest stakeholder’s position in the online-specific lender.

The AA+ rated credit card issuer plans to issue 100 billion won worth three-year corporate bonds in June, said the company on Tuesday. It has not disclosed any other details.

The last time the company issued bonds was in 2003.

Market observers suspect BC Card to use the proceeds to acquire K-Bank new shares. The credit card company plans take part in K-Bank’s 600-billion-won new rights offering next month to raise its stake in the internet lender to 34 percent.

BC Card, however, denied the speculation, saying that the bond issuance was planned even before it made stake purchase announcement last month. “The company will pay for K-Bank shares with proceeds gained from its sale of Master Card stake as previously announced,” said a BC Card official.

The proceeds from bond issues will be used for regular business operations, the company added.

BC Card already acquired a 10 percent stake K-Bank in mid April from KT, its parent and one of major key shareholders of the cash-strapped internet lender. The additional stake acquisition next month will make the company largest shareholder of K-Bank, allowing it provide direct funding to the bank on behalf of its parent. KT, local telecom giant, initially planned to become K-Bank’s largest shareholder itself but its plan fell through due to legislative setbacks.

K-Bank, which KT-led consortium established in 2017, has been struggling to keep business afloat due to stalled capital refueling. It has suspended its loan service operations since April 2019.

By Pulse

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