Hana Financial Group plans to raise 1.4 trillion won ($1.26 billion) through a new share issue to fund its $4.1 billion takeover of Korea Exchange Bank from U.S. private equity firm Lone Star, Reuters reported. The shares would be issued to 36 investors including Morgan Stanley Investment Management and Schroder Investment Management, Reuters reported.
(Reuters) – Hana Financial Group Inc said it will raise 1.4 trillion won ($1.26 billion) through a new share issue to fund its takeover of Korea Exchange Bank .
The proceeds will be used to finance its $4.1 billion acquisition of a controlling stake in KEB from U.S. private equity firm Lone Star [LS.UL].
The shares would be issued to 36 investors including Morgan Stanley Investment Management and Schroder Investment Management at 42,000 won each, or a 6.8 percent discount to Thursday’s closing price of 45,050 won, Hana said late on Thursday.
Earlier, the country’s fourth-largest financial group by assets said it had agreed to buy a 6.25 percent stake in KEB from Export-Import Bank of Korea (KEXIM).
Hana, however, made an option deal with KEXIM, under which the latter can decide to sell the stake between six months and one year after Hana completes the purchase of Lone Star’s stake in KEB, according to its regulatory filing.
If KEXIM decides to sell its stake to Hana, Hana should pay 7 percent annual interest on top of about 574 billion won, based on the offer price of 14,250 won per share. (Reporting by Ju-min Park; Editing by Chris Lewis)