Taiwan-based Fubon Life Insurance Co. Ltd. may become the largest shareholder of South Korean insurer Hyundai Life Insurance Co. Ltd. if shareholder Hyundai Mobis Co. Ltd. decides to forfeit its options in a recapitalization of the insurance company, Pulse reported March 28.
Hyundai Life plans to raise 300 billion won of capital via a share issuance in order to to meet new international accounting standards known as International Financial Reporting Standards 17, which will come into effect in 2021.
Hyundai Mobis plans to forfeit its entitlement in Hyundai Life's rights offering to conserve funds amid a challenging automobile market both in South Korea and abroad, insurance industry sources said.
The Fubon Financial Holding Co. Ltd. unit currently holds a 48% stake in Hyundai Life, while Hyundai companies Hyundai Mobis and Hyundai Commercial Inc. hold 30% and 20%, respectively, the report said. Should the new share issuance be allocated according to the existing shareholding structure, Fubon Life would hold a greater stake in Hyundai Life than the two Hyundai group companies.
The issuance requires South Korean and Taiwanese regulatory approvals, and is expected to complete by the third quarter.
As of March 28, US$1 was equivalent to 1,063.40 South Korean won.