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| The headquarters of Seoul Guarantee Insurance (SGI) in central Seoul / Courtesy of SGI |
By Anna J. Park
As Seoul Guarantee Insurance (SGI) has passed the preliminary evaluation for being listed on the KOSPI stock market, Korea's main benchmark index, their IPO is expected to be completed within the second half of this year.
The Korea Exchange (KRX), announced Wednesday morning that SGI has been confirmed to meet the listing requirements and has qualified to proceed with the IPO steps. It is estimated that the firm could make its stock market debut by the end of October. Mirae Asset Securities and Samsung Securities will manage the process as lead underwriters for the IPO.
SGI is Korea's only guarantee insurance company, maintaining a monopoly in the country. From a global perspective, it is a rare phenomenon for a guarantee insurance company to maintain a monopoly.
The firm's value is estimated at between 3 trillion won ($2.24 billion) and 5 trillion won. The company's equity capital stood at 5.25 trillion won as of the end of 2022, with an annual operating profit of 727.6 billion won, a 15 percent increase from 2021.
SGI's annual guarantee volume is approximately 323 trillion won, making it the world's fourth-largest comprehensive guarantee company in terms of insurance premiums among member companies of the International Credit Insurance and Surety Association (ICISA), as of year 2021.
With its dividend payout ratio of 50 percent, it is considered a top-performing dividend stock among financial companies in Korea.
The guarantee insurance firm's IPO plan began in summer 2022, as the government aims to accelerate the retrieval of public monies amounting to 10.2 trillion won, which it lent to the firm during the Asian financial crisis in the late 1990s. So far, nearly half of the injected money has been retrieved through dividends.
As a result of the public funding, the state-run Korea Deposit Insurance Corporation (KDIC) holds a 93.85 percent stake in SGI. The stock's high dividend payout ratios, solid fundamentals and lower investment risks are expected to attract investors to its public offering later this year.
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