'Public sale of South Korea LG Card may lower price'

A public sale of South Korea's LG Card Co Ltd may result in a lower price for creditors than a stake sale and delay the deal by two or three weeks, the main creditor said on Sunday.
Fourteen creditors, who hold 82 percent of LG Card, have sought bids for a stake of between 51 and 72 percent of the South Korea's top credit card firm. The stake is valued at up to 3.9 trillion won ($4.1 billion) at market prices.
On Tuesday, the state-owned Korea Development Bank (KDB), the main creditor of LG Card, and the regulatory Financial Supervisory Commission (FSC) said a public sale might be considered so minority shareholders could sell their shares.
"We doubt if the deal could fetch as much as creditors wanted should it be conducted via a public sale," KDB deputy governor Kim Jong-bae told reporters at a seminar on Sunday.
Five firms are bidding for the credit card company, including Standard Chartered and Shinhan Financial Group, South Korea's second-ranked financial services firm.
By treating LG Card as a company in restructuring, the 14 creditors may seek to be exempt from a security law requiring a public sale if more than 10 of them sold shares in a six-month period.
Kim said if regulators called for a public sale, there were two options the creditors could pursue.
"Firstly, we can persuade creditors with minority stakes to sell their shares in the market on their own," he said.
"That will keep the current sale process intact. We can still offer more than 51 percent," he added.
Alternatively, the creditors could tell the bidders to make offers to buy shares from minority shareholders after they presented bids for as many shares as they want from creditors.
"These two choices are what we can make. Considering this, the sale process will be delayed by two or three weeks," Kim noted, adding creditors would meet this week to discuss their options.
The preliminary bidders completed online due diligences on LG Card last month and final bids had been expected later this month.
Kim also said KDB would decide what to do with its 31 percent stake in Daewoo Shipbuilding and Marine Engineering around October.
"We outsourced to a consulting firm what we can do with the shares, which included whether it is fine with the KDB holding the stake or selling it."