Business Context and Reporting Period
This Form 6-K filing, dated December 7, 2018, serves as a convocation notice for an Extraordinary General Meeting of Shareholders of Woori Bank. The primary purpose of the meeting is to approve a comprehensive stock transfer plan to establish a new financial holding company, Woori Financial Group Inc. The filing includes the draft Articles of Incorporation for the new entity and details regarding the appointment of directors.
Key Financial Metrics and Capital Structure
The filing does not contain historical financial performance data such as revenue, profit, cash flow, or margins for Woori Bank or its subsidiaries. Instead, it outlines the proposed capital structure for the new holding company:
- Capital Stock: Won 3,400,821,530,000 (calculated as 680,164,306 shares issued at a par value of Won 5,000).
- Authorized Shares: 4,000,000,000 shares.
- Profit Distribution Limits: Woori Bank is permitted to distribute profits up to Won 505,000 million, and Woori Credit Information Co., Ltd. up to Won 1,008 million, prior to the effective date of the stock transfer.
- Debt Issuance Authority: The Articles of Incorporation authorize the issuance of convertible bonds and bonds with warrants up to an aggregate par value of KRW 2 trillion each, and participating bonds up to KRW 1 trillion.
Material Changes and Corporate Actions
The filing details a significant corporate restructuring:
- Formation of Holding Company: Six entities (Woori Bank, Woori FIS, Woori Finance Research Institute, Woori Credit Information, Woori Fund Services, and Woori Private Equity Asset Management) will transfer their stocks to establish Woori Financial Group Inc.
- Stock Transfer Ratios: Shareholders of the transferring companies will receive shares of the new holding company based on specific ratios (e.g., 1.0000000 share for Woori Bank; 0.2999709 for Woori FIS).
- Effective Date: The stock transfer is scheduled to become effective on January 11, 2019, subject to regulatory approval.
- Board Composition: The filing proposes the appointment of four new directors (three outside directors and one non-standing director) and two outside directors to serve on the Audit Committee.
Guidance, Risks, and Contingencies
The filing outlines specific conditions and risks associated with the stock transfer plan:
- Regulatory Approval: The plan is contingent upon approval from the Financial Services Commission pursuant to the Financial Holding Company Act.
- Dissenting Shareholders: If dissenting shareholders exercise appraisal rights exceeding 15% of the total issued shares of any Stock Transfer Company, the transfer may be suspended by the respective board of directors.
- Contingent Capital: The Articles of Incorporation authorize the issuance of "contingent capital securities" (convertible or bail-in) up to KRW 20 trillion in aggregate par value. These securities may be converted to shares or have redemption obligations waived if the company is designated as insolvent or meets specific financial distress criteria.
- Preferred Shares: The company may issue various classes of preferred shares (perpetual, redeemable, convertible) up to 50% of total issued shares, with terms determined by the Board of Directors.
Investor Verification Checklist
- Verify the final approval status of the stock transfer plan by the Financial Services Commission.
- Confirm the exact number of shares issued to the new holding company and the final share count for existing shareholders post-transfer.
- Review the specific terms of any contingent capital securities issued, particularly the triggers for conversion or debt restructuring.
- Monitor the appointment of the new board members and their independence status as disclosed in the filing.
- Check for any updates regarding the suspension of the transfer due to dissenting shareholder appraisal rights exceeding the 15% threshold.