South Korea’s KB Kookmin Bank, richer through handsome returns from a latest equity sale, has offered to invest extra to command a dominant stake in Indonesia’s mid-sized Bank Bukopin.
According to industry sources on Wednesday, KB Kookmin Bank has decided to invest $200 million to join the rights offering from Bank Bukopin, which could make the Korean bank the largest shareholder with a 51 percent stake.
The two parties are discussing exact transaction price and scale.
The Korean bank has already deposited $200 million into an escrow account this month in show of commitment to the acquisition.
The bank is currently second largest with a 22 percent in Bank Bukopin after Indonesian conglomerate Bosowa Corporation with 23.4 percent following its purchase of shares in June 2018 at 116.4 billion won ($96.6 million).
Bank Bukopin is proposing issues of new shares to existing shareholders to cover liquidity shortage following the coronavirus-led local stock market crashes. Its stock prices sank to 189 Indonesian rupiah ($0.01) on June 23 from 380 rupiah as of the end of June 2018 when KB Kookmin Bank purchased its stocks.
Regulations on the acquisition of local financial institutions by foreign capital in Indonesia also have been eased to ease liquidity woes of companies in the country.
Under the eased regulations, KB Kookmin is not required to buy other Indonesian institutions if it has majority stake in a lender like Bank Bukopin.
Bank Bukopin, founded in 1970, is a mid-sized commercial bank with 450 branches across Indonesia. It delivered 20 billion won in net income last year.
KB Kookmin, meanwhile, earned 500 billion won by selling its 2.5 percent stake in SK Corp. to a foreign institution in a block trade after the market closed on Wednesday. It has cashed in almost 300 billion won, compared to what it had paid for the acquisition, with the stake sale for 280,000 won apiece.
SK shares surged 71 percent to 286,500 won from 167,500 won as of the end of March thanks to enthusiasm over the blockbuster public sale of its subsidiary SK Biopharmaceuticals Co.
The proceeds will be used to finance KB Financial Group’s acquisition of midsized insurer Prudential Life Insurance and offer financial aids to virus-hit companies, KB Kookmin Bank said.
By Moon Il-ho and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]