By Na Jeong-ju
Korea Exchange Bank (KEB), a subsidiary of Hana Financial Group, is likely to sell its stake in SK hynix in a few months to finance a reconstruction project for Hana's head office in Seoul, sources said Sunday.
KEB holds a 1.4 percent stake, worth 370 billion won ($346 million), in the semiconductor company as a result of a debt-for-equity swap, that took place before the firm was acquired by SK Group in Feb. 2012.
The stake sale appears to be part of Hana's move to quicken the integration of KEB into Hana, which already has a larger banking subsidiary, Hana Bank.
"This is the best timing for selling SK hynix shares because its stock price has risen for the past years on solid performances," said an analyst, asking not to be named. "Hana may attempt to secure cash by selling KEB's assets and re-invest the money in ongoing projects, including the rebuilding of its head office in Euljiro in central Seoul."
KEB earlier sought to dispose of its stake in SK hynix, but suspended the plan partly due to protests from unionists. Woori Bank and Shinhan Bank, which once held stakes in SK hynix through a debt-for-equity swap like KEB, have already sold these stocks.
"There has been a re-evaluation of KEB's assets since we took over the bank. However, we cannot comment on details of asset realignment that is occurring in KEB," a Hana official said.
Hana is expected to maintain the twin-bank system for the time being given the negative sentiment among KEB workers toward an early integration.
Hana bought a 51.02 percent stake of KEB from U.S. buyout firm Lone Star Funds in early 2012, and completed a share swap last year to own a 100 percent stake in KEB.
Speculation has been circulating that KEB may sell its SK hynix stake as early as possible to maximize its investment gains.
The share price of SK hynix ended at 38,700 won on Friday, up some 150 percent from a three-year low of 15,500 won on Aug. 26 in 2011.
"KEB will be able to secure investment gains of some 140 billion won if it sells its stake in SK hynix," Sohn Joon-beom, an analyst at LIG Investment & Securities said in a recent report. "The stake sale, if it happens, may speed up the process of combining KEB into Hana, which may spur an upward momentum for Hana's share prices."
KEB plans to set up a credit card subsidiary after separating its card division as early as next month. The new firm will later be merged with Hana's card unit, Hana SK Card.
KEB initially planned to get approval from regulators for the creation of the card firm by March 31, but had to delay the plan due to the recent turmoil in the financial sector over consumer data leaks, KEB officials said.
Hana officials hope the planned merger will pave the way for a smooth integration between KEB and the group.
The KEB union has opposed selling the bank's assets. Hana Chairman Kim Jung-tae earlier promised to ensure the independent operation of KEB for a period of five years until 2017.
Korea Exchange Bank (KEB), a subsidiary of Hana Financial Group, is likely to sell its stake in SK hynix in a few months to finance a reconstruction project for Hana's head office in Seoul, sources said Sunday.
KEB holds a 1.4 percent stake, worth 370 billion won ($346 million), in the semiconductor company as a result of a debt-for-equity swap, that took place before the firm was acquired by SK Group in Feb. 2012.
The stake sale appears to be part of Hana's move to quicken the integration of KEB into Hana, which already has a larger banking subsidiary, Hana Bank.
"This is the best timing for selling SK hynix shares because its stock price has risen for the past years on solid performances," said an analyst, asking not to be named. "Hana may attempt to secure cash by selling KEB's assets and re-invest the money in ongoing projects, including the rebuilding of its head office in Euljiro in central Seoul."
KEB earlier sought to dispose of its stake in SK hynix, but suspended the plan partly due to protests from unionists. Woori Bank and Shinhan Bank, which once held stakes in SK hynix through a debt-for-equity swap like KEB, have already sold these stocks.
"There has been a re-evaluation of KEB's assets since we took over the bank. However, we cannot comment on details of asset realignment that is occurring in KEB," a Hana official said.
Hana is expected to maintain the twin-bank system for the time being given the negative sentiment among KEB workers toward an early integration.
Hana bought a 51.02 percent stake of KEB from U.S. buyout firm Lone Star Funds in early 2012, and completed a share swap last year to own a 100 percent stake in KEB.
Speculation has been circulating that KEB may sell its SK hynix stake as early as possible to maximize its investment gains.
The share price of SK hynix ended at 38,700 won on Friday, up some 150 percent from a three-year low of 15,500 won on Aug. 26 in 2011.
"KEB will be able to secure investment gains of some 140 billion won if it sells its stake in SK hynix," Sohn Joon-beom, an analyst at LIG Investment & Securities said in a recent report. "The stake sale, if it happens, may speed up the process of combining KEB into Hana, which may spur an upward momentum for Hana's share prices."
KEB plans to set up a credit card subsidiary after separating its card division as early as next month. The new firm will later be merged with Hana's card unit, Hana SK Card.
KEB initially planned to get approval from regulators for the creation of the card firm by March 31, but had to delay the plan due to the recent turmoil in the financial sector over consumer data leaks, KEB officials said.
Hana officials hope the planned merger will pave the way for a smooth integration between KEB and the group.
The KEB union has opposed selling the bank's assets. Hana Chairman Kim Jung-tae earlier promised to ensure the independent operation of KEB for a period of five years until 2017.
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