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LG Card may be forced into public sale

Creditors of South Korea's top card issuer LG Card may be forced to consider a public sale of their interest to enable minority shareholders to dispose of their stock.

As creditors consider selling 51% of their 72% share through an auction, South Korean regulators are deciding whether to force creditors to sell their whole share and therefore allow minority shareholders to sell their shares too.

If the sale of company, which has around 20% of South Koreans as customers, goes ahead it could raise an estimated $5 billion (GBP2.7 billion), including management premiums.

The sale of LG Card, which was bailed out in 2004 following the collapse of a credit card boom in the country, is predicted to be South Korea’s second largest acquisition following Lone Star’s disputed agreement in May 2006 to sell Korea Exchange Bank to Kookmin Bank.

We are assessing whether LG Card can be the subject of a public sale after the Korea Development Bank (KDB) asked it informally, said Kim Yong-hwan, a director general at the Financial Supervisory Commission, in comments reported by the Financial Times.

The move could delay the sale process, he added. The current stake in LG Card has an estimated value of GBP2.2 billion.