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 approved by the Board of Directors on May 21, 2021. The transaction involves the integration of Woori Financial Capital Co., Ltd. (Woori Financial Capital), a subsidiary engaged in installment and lease financing services, as a wholly-owned subsidiary of Woori Financial Group.
Key Financial Metrics
The filing provides summary financial information for Woori Financial Capital as of December 31, 2020. Woori Financial Group's consolidated financial metrics for the period are not included in this specific filing.
| Metric | Value (KRW) |
|---|---|
| Total Assets (Woori Financial Capital) | 8,880,116,848,104 |
| Total Liabilities (Woori Financial Capital) | 8,053,840,207,192 |
| Total Equity (Woori Financial Capital) | 826,276,640,912 |
| Capital Stock (Woori Financial Capital) | 287,729,450,000 |
Revenue, profit, cash flow, and margin data are not provided in this filing. Liquidity and debt metrics are limited to the total liabilities figure for the subsidiary.
Material Changes and Transaction Details
The primary material change is the proposed stock exchange to make Woori Financial Capital a wholly-owned subsidiary. Key transaction details include:
- Exchange Ratio: 1 share of Woori Financial Group for 1.0567393 shares of Woori Financial Capital.
- Exchange Prices (as of May 20, 2021): Woori Financial Group at KRW 11,044; Woori Financial Capital at KRW 11,671.
- New Issuance: Woori Financial Group will issue 5,792,866 new common shares to Woori Financial Capital shareholders (excluding the parent).
- Fractional Shares: Cash will be distributed for fractional shares based on the closing price on the listing date.
- De-listing: Woori Financial Capital is expected to be de-listed following the transaction.
Outlook, Risks, and Management Commentary
Purpose: Management states the transaction aims to enhance corporate value by improving management efficiency and creating business synergy and unity between the two entities.
Schedule:
- Stock Exchange Plan Date: June 4, 2021
- Record Date: June 7, 2021
- Effective Date: August 10, 2021
- Expected Listing of New Shares: August 27, 2021
Risks and Contingencies:
- Termination: The agreement may be terminated if shareholders owning more than 20% of Woori Financial Group shares oppose the plan, or if material changes occur in assets/operations, or if legal violations arise.
- Tax Implications: The transaction is an OTC transaction subject to capital gains tax. Foreign entities/non-residents may pay the lesser of 11% of total share value or 22% of capital gains. A 0.43% securities transaction tax also applies.
- Appraisal Rights: Shareholders of Woori Financial Group will not be granted appraisal rights as the plan follows small-scale stock exchange procedures.
Investor Verification Checklist
- Verify the final approval of the stock exchange by relevant regulatory authorities and the completion of the transaction by the effective date of August 10, 2021.
- Confirm the actual closing share price on the listing date to calculate cash distributions for fractional shares.
- Monitor for any shareholder opposition exceeding the 20% threshold which could terminate the agreement.
- Review the de-listing status of Woori Financial Capital post-transaction.
- Assess the specific tax liabilities applicable to individual investor circumstances, particularly for foreign non-residents.