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Woori Financial Group Delays $1bn Share Sale Amid LG Card Crisis

Strategic Insights

— 1 min read

Woori Financial Group's plan to sell a 15% stake through an American depositary receipt issue has been pushed back to May due to concerns over the impact of LG Card's financial troubles. As the main creditor of LG Card, Woori has suffered from rising bad loans since the consumer credit bubble burst in 2002. LG Card's liquidity crunch has worsened, with creditors unable to agree on a $4.2bn rescue package, leaving the company facing a possible collapse.

Key Takeaways:

  • Woori Financial Group has delayed a $1bn share sale due to concerns over the potential effect of LG Card's financial problems.
  • The government, which owns 87% of Woori, had planned to sell a 15% stake through an American depositary receipt issue in February.
  • LG Card's liquidity crunch has worsened, with creditors unable to agree on a $4.2bn rescue package.
  • Under the revised rescue plan, Korea Development Bank will take a 22.5% stake in LG Card and provide Won500bn in fresh capital.
  • LG Card's creditors have revised the proposed rescue plan, increasing the responsibility of Korea Development Bank.
  • LG Card shares have plummeted by 15% over three consecutive days to a record low of Won2,155.
  • The company claims it will not be able to survive without an additional $670m of loans.
  • Woori Financial Group reported a net loss of Won137.4bn ($115.6m) in the third quarter of last year.
  • The bank has suffered from rising bad loans since the consumer credit bubble burst in late 2002.

Statistics:

  • $1bn: The amount Woori Financial Group was planning to raise from the share sale.
  • 87%: The government's stakes in Woori Financial Group.
  • 15%: The portion of Woori Financial Group's stake being sold through an American depositary receipt issue.
  • $4.2bn: The proposed rescue package for LG Card.
  • 22.5%: The revised stake of Korea Development Bank in LG Card.
  • Won500bn: The fresh capital to be provided by Korea Development Bank to LG Card.
  • Won2,155: The record low value of LG Card shares.
  • 15%: The decline in LG Card shares over three consecutive days.
  • Won137.4bn: Woori Financial Group's net loss in the third quarter of last year.
  • $115.6m: Woori Financial Group's net loss in the third quarter of last year (USD equivalent).

Sources:

  • Woori Financial Group, South Korea's third-largest financial services company
  • Korea Deposit Insurance Corp
  • Korea Development Bank
  • LG Card, South Korea's biggest credit card issuer

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