Kyobo Life seeks to transition into financial holding company 

South Korean life insurance behemoth Kyobo Life Insurance Co. is seeking to transition into a financial holding company to expand its business foothold. 

Industry insiders familiar with the development told The Korea Economic Daily that Kyobo Life informed its financial investors (FIs) of a plan to pass a resolution on the transition at the next board of directors meeting scheduled for February 2023.

Under the plan, Kyobo Life will be split into a holding company and other businesses through an equity spinoff. 

Chairman Shin Chang-jae and the FIs will have stakes in the holding company.

Affinity Equity Partners has a 9.05% stake in Kyobo Life, followed by Affirma with a 5.33% stake and IMM Private Equity Inc. with a 5.23% stake. 

To complete the lineup of a financial holding company, Kyobo will seek to acquire additional insurance companies. 

As such, the company decided to participate as a key investor in a fund organized by The Seed Partners, which is negotiating to acquire MG Non-Life Insurance Co.

The word on the street is that Kyobo will foot two-thirds of the acquisition cost estimated to be between 50 billion ($37.8 million) and 130 billion won.

Whether the plan is likely to materialize is another story. 

Both the equity spinoff and transition into a holding company require special resolutions to be passed at a meeting of shareholders. 

For a special resolution to be approved, more than a third of the total shareholders must attend the meeting and more than two-thirds of the attendees must agree on passing the resolution. 

But industry insiders say Kyobo’s financial investors are not favorable to the company's top management. 

IPO AMBITIONS

Back in July, the Korea Exchange did not approve of Kyobo becoming a public company.

The securities exchange operator cited the ongoing put option lawsuit between Kyobo and a consortium led by Affinity Equity Partners and participated in by IMM Investment, Baring Private Equity Asia and GIC. 

The fact that its net profit plunged by 27% on-year in this year's third quarter also worked against its listing screening. 

Kyobo Life hopes to increase its corporate value through the transition into a holding company and seek a listing again in the future. 

Write to Dong-Hun Lee and Jin-Hyoung Cho at leedh@hankyung.com
Jee Abbey Lee edited this article.