Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Financial Group) reports a material event regarding a stock exchange resolution dated June 21, 2019. The filing details the plan to integrate Woori Card Co., Ltd., an affiliate providing credit card and installment financing services, as a wholly-owned subsidiary through a small-scale stock exchange.
Key Financial Metrics
The filing provides summary financial information for Woori Card Co., Ltd. for its most recent fiscal year (in Won):
- Total Assets: 9,983,104,238,399
- Total Liabilities: 8,296,355,760,195
- Total Equity: 1,686,748,478,204
- Capital Stock: 896,331,000,000
- Issued Shares: 179,266,200 common shares
Woori Financial Group does not provide its own consolidated revenue, profit, cash flow, or margin data in this specific filing. The filing focuses on the valuation and exchange mechanics of the transaction.
Material Changes and Transaction Details
The primary material change is the proposed acquisition of Woori Card via stock exchange. Key transaction terms include:
- Exchange Ratio: 1 share of Woori Financial Group for 0.4697442 shares of Woori Card.
- Consideration: Woori Card shareholders will receive 0.2348651 shares of Woori Financial Group plus Won 3,338 cash for each Woori Card share held.
- Valuation Basis:
- Woori Financial Group exchange price: Won 14,212 (arithmetic mean of 1-month, 1-week, and closing prices).
- Woori Card exchange price: Won 6,676 (weighted average intrinsic value).
- New Issuance: Woori Financial Group will issue 42,103,377 new common shares.
- Total Payment Amount: Won 598,390,575,600.
Outlook, Risks, and Management Commentary
Purpose: Management states the goal is to enhance corporate value by improving management efficiency and creating business synergy and unity between the two entities.
External Appraisal: Samil PricewaterhouseCoopers conducted an external appraisal (April 1, 2019 – June 20, 2019) and issued an unqualified opinion on the appropriateness of the exchange amount and ratio.
Risks and Contingencies:
- Appraisal Rights: Opposing shareholders of Woori Financial Group will not be granted appraisal rights under the small-scale stock exchange procedures, unless a shareholder owning more than 20% of shares objects, which would trigger ordinary procedures.
- Termination: The plan may be modified or terminated due to certain reasons.
- Regulatory Approval: The schedule is subject to change based on regulatory approval or consultation among parties.
- Future Sales: Woori Financial Group and Woori Bank have engaged advisors, including Goldman Sachs, to review potential sales of Woori Financial Group shares held by Woori Bank resulting from this exchange.
Schedule: The effective date of the stock exchange is expected to be September 10, 2019, with new shares listing expected on September 26, 2019.
Investor Verification Checklist
- Verify the final approval of the stock exchange plan by the shareholders of Woori Card (record date July 1, 2019).
- Monitor for any objections filed by shareholders owning more than 20% of Woori Financial Group shares between July 10 and July 17, 2019, which could alter the procedure.
- Confirm regulatory approvals required for the effective date of September 10, 2019.
- Review the outcome of the engagement with Goldman Sachs regarding the potential sale of shares held by Woori Bank.
- Check for any updates to the exchange ratio or cash consideration if market conditions change significantly prior to the effective date.