- April 11, 2006
Media Contact : Byung-ki Park (+82-2-758-0307)
The Korea Deposit Insurance Corporation (KDIC) sold its 6.2% percent stake in Shinhan Finance Holdings Company via block deals. The state-run agency previously owned the 22.36 million shares of Shinhan, and it sold 90% of the shares to BNP Paribas at no discount to its closing price of 46,600 won on Monday. The remainder was sold to other domestic and foreign investors at the same price.
When buying Chohung Bank in August, 2003, Shinhan sold the stake to KDIC in the form of redeemable convertible preferred shares at 18,086 won per share as part of payment. In November 2005, KDIC converted its 22 million shares into common shares.
This block trade maximized the proceeds since 90% of the stake was sold to the strategic investor with no discount to its closing price. Typically, block deals offer a 3 % discount to closing price. As a result, the share sale assured the KDIC to recover 2.3 trillion won of public fund that was put into Chohung Bank, which amounted to 2.7 trillion won in total.
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