PEF Two Firms Participate in 'MG Sonbo' Acquisition...Meeting 'Competitive Bidding' Criteria

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The Korea Deposit Insurance Corporation (KDIC) has met the competitive bidding conditions for 'MG Insurance' on its third attempt to sell the company.

According to KDIC on the 12th, two private equity funds (PEFs) submitted letters of intent following the preliminary public sale bidding for MG Insurance. KDIC plans to immediately begin the major shareholder eligibility review for the two PEFs. Subsequently, KDIC is expected to conduct preliminary due diligence on the two PEFs by May and start the main bidding process from June.

KDIC has been attempting to sell MG Insurance since last year but repeatedly failed to proceed with the sale due to a lack of bidders. Under the National Contract Act, the sale of MG Insurance cannot proceed to the next stage unless the competitive bidding condition of participation by two or more companies is met.

During the sale attempt in February last year, there were no bidders, and in August, there was only one bidder. This time, with two or more potential buyers submitting letters of intent, the process can move forward to the main bidding stage.

This sale will be conducted in the manner preferred by the buyer, such as mergers and acquisitions (M&A) or portfolio acquisition (P&A). P&A allows the buyer to selectively acquire assets and liabilities, enabling them to exclude certain items like non-performing assets and subordinated bonds.

A KDIC official explained, "The sale method will be decided after consultation with the companies that submitted letters of intent," adding, "We expect to proceed with the main bidding between May and June."

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