The sale of Sangsangin Savings Bank has hit a snag. The acquirer, KBI Group, withdrew its application for share acquisition approval required for the takeover. While the transaction contract between Sangsangin and KBI remains in effect and reapplication is possible at a later date, there are also concerns that the acquisition itself may be fully withdrawn.
According to financial industry sources on the 31st, KBI, which had sought to acquire Sangsangin Savings Bank, recently withdrew its share acquisition approval application previously submitted to financial authorities. Earlier, KBI Group affiliate KBI Guksan Industry signed a share purchase agreement (SPA) with Sangsangin to acquire 90.01% of Sangsangin Savings Bank's shares. The transaction price was 110.7 billion won.
Originally, this day was the deadline for contract termination as disclosed by Sangsangin. Sangsangin announced that if Financial Services Commission approval for share acquisition is not obtained or confirmed to be unobtainable by the end of this month, the parties may rescind the share transfer agreement.
In response, market observers predicted that Sangsangin would extend the contract termination deadline further. However, contrary to expectations, KBI withdrew the share acquisition approval application entirely.
Nevertheless, the transaction between the two companies has not been terminated. The contract remains valid, and there is still a possibility that KBI may reapply for share acquisition approval in the future.
On this afternoon, Sangsangin announced that it plans to hold discussions with the buyer through next month's 21st regarding whether to maintain the contract and any changes to its terms.
The detailed reasons for the withdrawal application remain undisclosed, but concerns have been raised about the burden of additional capital expansion after acquisition. Even if KBI acquires Sangsangin Savings Bank, more funds will be needed to clean up non-performing assets and improve capital ratios.
Sangsangin Savings Bank, which received corrective action orders from the Financial Services Commission, has recently recovered its performance but requires additional capital injection for normalization. As of the first half of this year, Sangsangin Savings Bank's delinquency rate stood at 14.23%, more than double the industry average of 6.26%. The non-performing loan ratio also reached 18.51%, significantly exceeding the industry average of 8.16%.
Regarding the withdrawal of the acquisition application, KBI stated, "We clearly demonstrated our intention to acquire by actively agreeing to a large-scale rights offering (paid-in capital increase) after acquisition, which had been an issue during discussions with supervisory authorities," and added, "We were making full preparations for normalizing management after the acquisition."
It further added, "To ensure smooth progress of the acquisition process, we will extend the contract period with Sangsangin and renegotiate detailed terms, while doing our utmost to complete the acquisition."
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