Samsung firms sell $1.3 billion Samsung Electronics stock to maintain compliance

A visitor takes pictures of a photo wall at the booth of Samsung at the IFA Consumer Electronics Fair in Berlin on September 2, 2017. (AFP)
Updated 30 May 2018
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Samsung firms sell $1.3 billion Samsung Electronics stock to maintain compliance

SEOUL: Samsung Group’s two insurance firms said on Wednesday they will sell $1.3 billion worth of stock in the conglomerate’s biggest earner, Samsung Electronics, to maintain regulatory compliance.
Samsung Life Insurance Co. Ltd. and Samsung Fire & Marine Insurance Co. Ltd. separately said their electronics affiliate’s current policy of canceling its own shares to raise the value of investors’ holdings risks pushing their own holdings beyond regulatory limits.
Samsung Electronics stock fell 3.5 percent after local media first reported the sales plans, as investors feared the sudden increased supply would push down its price, analysts said.
The announcements come at a time when regulators are questioning conglomerates’ cross-shareholding arrangements, saying the web-like ownership structures undermine corporate governance by allowing founding families to control business empires with only direct minority stakes in key units.
In South Korea, conglomerates’ financial arms are required to limit their combined stake in a non-financial affiliate to 10 percent.
Samsung Life owns 8.63 percent of Samsung Electronics stock with a market value of $26 billion. It said it will sell 1.2 trillion won ($1.11 billion) worth in a single transaction before the stock market opens on Thursday, reducing its stake to 7.92 percent.
Samsung Fire & Marine said it will also conduct a block sale of 206 billion won worth of stock, reducing its stake to 1.38 percent from 1.45 percent.
The block sale in 48,300 won – 49,500 won each range represents a discount of up to 2.4 percent to Samsung Elec’s last traded price, according to a term sheet of the deal seen by IFR on Tuesday.
Samsung Life may need to further reduce its holding should parliament push through a 2016 proposal to limit an insurer’s investment in any affiliate to 3 percent or less of the insurer’s total assets, to promote stable asset management.
The ownership of South Korea’s powerful conglomerates has come under increased scrutiny this year following a series of scandals involving members of conglomerates’ founding families.
The chairman of the Financial Services Commission recently said Samsung — a group of 62 affiliates — must consider ways to reduce the risk of having too much of its $375 billion assets concentrated in one place, including selling some or all of Samsung Life’s stake in Samsung Electronics.
The chief of the Korea Fair Trade Commission also called the group’s ownership structure “unsustainable.”
In April, Samsung SDI Co. Ltd. sold $526 million worth of shares in affiliate Samsung C&T Corp. to reduce cross-shareholding and secure funds for investment.


IPO of remaining 50% of Kuwaiti bourse seen in Q4 2019 or Q1 2020

Updated 1 min 16 sec ago
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IPO of remaining 50% of Kuwaiti bourse seen in Q4 2019 or Q1 2020

KUWAIT: The initial public offering for the remaining 50 percent of shares in the Kuwaiti bourse will take place in the fourth quarter of 2019 or the first quarter of 2020, said Abdulaziz Al-Marzouq, commissioner of the Capital Markets Authority and vice chairman of the bourse’s privatization committee.
On Thursday, a consortium led by Kuwait’s National Investment Co. and including the Athens bourse won a tender to acquire 44 percent of the Kuwait stock exchange.