Invitation to Tender to Be Issued This Month
Korea Development Bank (KDB) originally planned to complete the sale of KDB Life Insurance within this year. But the plan was put off to early next year as attractive companies such as Prudential Life were put up for sale.
KDB has promoted the sale of KDB Life since early this year. It has recently decided to issue an invitation to tender this month. Originally, the bank planned to invite tenders in November and select a preferred bidder and finalize the sale process in December. But the schedule was delayed. It will select a preferred bidder this month and finish negotiations with it early next year. The biggest reason for the delay is that big insurers such as Prudential Life have been or will be put up for sale.
Accordingly, KDB is currently preparing for due diligence on the insurer by the four companies that participated in the preliminary tender last month. Until now, companies with a stable business basis, such as financial holding companies, have not expressed their intention to buy KDB Life. But KDB does not rule out the possibility of financial holding companies participating in the tender.
However, it is unclear whether a preferred bidder will be selected in December.
Meanwhile, the Financial Supervisory Service is expected to release the outcome of its management evaluation of KDB Life early next year. KDB Life managed to make a turnaround and raise capital last year. It recently issued subordinated bonds to raise its risk based capital (RBC) ratio, a measure of financial soundness, to 250 percent. KDB acquired KDB Life Insurance for 650 billion won in 2010, and the sale price of KDB Life is now estimated at around 200 billion won to 800 billion won.