Woori Financial Group makes offer for Daol Investment

A promotional digital display set up at the Woori Financial Group building in central Seoul on Friday. [YONHAP]

Woori Financial Group has submitted a letter of intent to acquire a majority stake in Daol Investment, Woori confirmed on Sunday.

Woori did not disclose details of the potential acquisition, including the price and number of shares, but local media reports suggest that Daol will sell 52% of the venture capital firm for at least 200 billion won ($158 million). It is said that

Woori “submitted a consent form, but there has been no progress since then,” said a company spokesperson.

If the deal closes, Uli will acquire the investment firm from Daol Investments & Securities.

Woori said it will strengthen its non-banking business this year.

In his New Year’s address last week, Woori Financial Group chairman Song Tae-soon said, “When the market environment gets tough, we need to strengthen the market position of our subsidiary’s core business and strengthen the base of our profit sources.”

Daol is a Kosdaq listed company. Its share is down more than 30% year-on-year.

Daol Investment & Securities is suffering from a recent liquidity crisis caused by a sharp rise in interest rates and defaults by companies related to the Legoland Korea Resort developer last year. He added that Woori Financial Group will “accelerate the expansion of its non-bank business portfolio, including securities, insurance and venture capital, which was postponed due to market volatility last year.”

Daol accepted employee voluntary retirements in November, but did not extend contact with some employees in its fixed income division.

The company is also selling non-essential assets, such as Daol Credit and Thai units, to “pre-emptively secure liquidity.”

Daol last week signed an agreement with Mason Capital Management and Lead Capital Management to sell all shares in its credit rating subsidiary for KRW 13 billion.

Daol is also looking to sell Daol Asset Management, local news outlets said, citing investment bank sources.

Daol is ready to sell the unit if a suitable buyer can be found due to the liquidity crisis, investment bank sources told the outlet on a daily basis.

However, Daol denied the rumors, saying there were no plans to do so.

Jin Minji [jin.minji@joongang.co.kr]

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