Sale of LG Card Postponed Until Next Year

The Korea Development Bank (KDB), which is now the sole manager of LG Card, has postponed the sale of LG Card until next year. It has decided to postpone the sale of LG Investment & Securities only until late May of this year, however.

“The normalization of LG Card management is not likely to happen within a year,” said Lee Sung-geun, the manager of the Corporate Finance Center at KDB, in a press conference at their headquarters in Yoeuido on January 13. “We have not thought of selling it this year.”

Lee also announced that LG Investment & Securities will be made available to public bids with foreign investors included, that the take-over letter will be accepted in March and that the sales process will be finished in May.

The KDB formed a Management Committee on the same day made up of four creditor banks, including the National Agricultural Federation (NACF), Woori Bank, and Kiup Bank. Kookmin Bank was not represented.

The Committee will appoint a professional CEO to run LG Card later this month. The recruitment process for the position will include public advertising and recommendations from headhunter companies regarding current and former domestic finance market CEOs with significant amounts of experience.

In addition, the KDB has formed a management support group made up of 15 professionals including three from Woori Bank. Starting early on January 14, the support group will be managing the financial flows of LG Card. It will promote plans to normalize the management situation late next month. The support group is led by Choi Ik-jong, head of the KDB’s Jonju Branch. Choi has facilitated the processing of large insolvent corporations in the past, including Hyundai Merchant Marine and Daewoo Motors.

The KDB will not implement a restructuring plan for now because normalization is the most impending issue.

Meanwhile, the creditor group will take up to 56 percent of LG Card stock with an investment conversion of one trillion won late this month. Afterwards, the creditor group will invest 1.65 trillion won and 800 billion won of liquidity from the LG Group to evenly reduce its capital to a rate of 44 to 1. The creditor group will invest 2.65 trillion won after this and acquire 99.3 percent of LG Card stock.

Keuk-In Bae bae2150@donga.com