Strategic Partnership with Foreign Private Equity Funds
Shinhan Financial Group has joined hands with Affinity Equity Partners and Baring Private Equity Asia after KB Financial Group formed a strategic partnership with The Carlyle Group.
Shinhan Financial Group held an extraordinary shareholder meeting on Sept. 4 and voted for a capital increase through third-party allocation to allocate 39.13 million shares to Centennial Investment Limited and SUPREME, L.P. The value of each share to be issued is 29,600 won and the total issuance value is 1,158.2 billion won.
Centennial Investment is a special purpose company for funds advised by Affinity Equity Partners. SUPREME is a special purpose company for funds advised by Baring Private Equity Asia. Centennial Investment and SUPREME will own 4 percent and 3.6 percent of Shinhan Financial Group shares with voting rights through the allocation, respectively. The combined ownership, 7.6 percent, is the second-largest behind that of the National Pension Service (9.2 percent).
The new shares cannot be sold for two years. A third party designated by Shinhan Financial Group can preferentially purchase the shares subsequently. Affinity Equity Partners and Baring Private Equity Asia have been given director nomination rights in return for their investment.
It is said that the capital increase has to do with the strategic partnership formed in June. At that time, KB Financial Group issued 240 billion won of exchangeable bonds to Kingsman Investments Limited with regard to its five million shares. Kingsman Investments Limited is an indirect subsidiary of the investment funds including Carlyle Asia Partners V, L.P. run by The Carlyle Group. As a result of its investment, The Carlyle Group acquired 1.2 percent of KB Financial Group.