Lone Star Funds to sell Korean bank stake worth $3.9 billion
11 Mar 2010
US private equity firm Lone Star Funds (Lone Star) plans to revive the sale of its majority stake in Korea Exchange Bank (KEB), South Korea's largest foreign exchange bank, which was stalled due to court cases and disputes over pricing with potential buyers.
Lone Star holds a 51-per cent ownership in South Korea's fifth largest bank by assets, which it acquired seven years ago when the distressed bank was looking for funds to drive the company's growth plans.
Dallas, Texas-based Lone Star specialises in purchasing distressed companies and assets worldwide and also buys underperforming and non-performing loans from banks through its global network of affiliate offices. The fund, established in 1995, has an asset base of approximately $24 billion.
Lone Star had bought the KEB stake in 2003 for $1.2 billion which has appreciated over threefold to $3.9 billion based on the closing price of 13,450 won ($11.86) for KEB stock, yesterday in Seoul.
KEB chief executive Larry Klane said through an in-house broadcast to the bank's employees that its largest shareholder had notified the board of an intention to resume the sale of its shares, according to a KEB spokesperson.
''It is anticipated that qualified participants will include Korean, non-Korean, strategic and financial investors,'' Lone Star further stated.
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