Seoul Guarantee Insurance sharply cuts IPO valuation

Seoul Guarantee Insurance Co. (SGI) has slashed its target valuation by about 40% in a renewed attempt to go public on the South Korean stock exchange.

According to the prospectus it filed with the Financial Supervisory Service on Jan. 24, SGI is seeking to raise between 1.82 trillion-2.22 trillion won ($1.3 billion-1.5 billion) in an initial public offering by selling 6,982,160 shares owned by Korea Deposit Insurance Corp. (KDIC).

The shares being offered represent a 10% stake in SGI from the state-run KDIC that owns 93.85% of the insurance company.

Its price band of 26,000-31,800 won is 38.6% lower than its previous guidance of 39,500-51,800 won suggested in October 2023. It dropped the IPO due to a tepid response to bookbuilding in 2023.

It will offer the shares in bookbuilding on Feb. 20-26 to debut on the main Kospi bourse on March 14.

RECOVERING PUBLIC MONEY

If successful, the IPO is expected to help the KDIC retrieve public monies injected into SGI between 1999 and 2001.

SGI was launched through a merger of two ailing Korean guarantee insurers which KDIC bailed out with an injection of 10.25 trillion won in the wake of the 1997-98 Asian financial crisis.

To attract investor interest, Seoul Guarantee will pay 200 billion won in dividends for 2024 earnings, equivalent to a dividend yield of about 10% for its IPO subscribers.

For the next three years, it will return 200 billion won to shareholders annually through dividend payouts and stock retirements.

Samsung Securities Co. and Mirae Asset Securities Co. underwrite the IPO.

Its IPO will follow LG CNS Co.’s Kospi debut on Feb. 5. The IT service provider set its IPO at the top of its price range to raise 1.2 trillion won. 

Meanwhile, online lender K Bank cancelled its IPO for a third time earlier this month, even after lowering its valuation.

Write to Han-Jong Choi at onebell@hankyung.com
 

Yeonhee Kim edited this article.