Business Context and Reporting Period
This Form 6-K filing by Woori Financial Group Inc. (Woori Financial Group) reports a material event occurring on October 23, 2020. The filing details a Board of Directors resolution to acquire a controlling stake in Aju Capital Co., Ltd., a financial services company, to strengthen business competitiveness and participate in management.
Key Financial Metrics and Transaction Details
The acquisition involves the purchase of 42,605,000 common shares of Aju Capital for a total price of approximately KRW 572.4 billion (subject to change). This transaction represents 2.25% of Woori Financial Group's total equity as of December 31, 2019 (KRW 25.49 trillion). Upon completion, Woori Financial Group will own 74.04% of Aju Capital's total issued shares.
Key financial data for Aju Capital (in millions of Won) for the fiscal years 2017-2019 is as follows:
| Metric | FY2019 | FY2018 | FY2017 |
|---|---|---|---|
| Total Assets | 7,473,168 | 6,201,432 | 5,310,639 |
| Total Liabilities | 6,659,178 | 5,449,071 | 4,607,391 |
| Total Equity | 813,990 | 752,361 | 703,248 |
| Operating Revenue | 726,369 | 615,238 | 621,581 |
| Net Income | 101,588 | 90,969 | 53,793 |
Material Changes and Transaction Structure
The acquisition is executed via cash payment. The shares are being purchased from Well to Sea Investment pursuant to a right of first refusal agreement entered into by Woori Bank on June 27, 2017. Following the acquisition, Aju Savings Bank, a wholly-owned subsidiary of Aju Capital, is expected to become a second-tier subsidiary of Woori Financial Group.
Outlook, Risks, and Contingencies
The filing notes that the inclusion of Aju Savings Bank as a second-tier subsidiary requires regulatory approval under relevant Korean laws, including the Financial Holding Company Act. The specific transaction date is currently undecided and will be confirmed later. The purchase price is subject to change.
Investor Verification Checklist
- Confirm the final transaction date and whether the purchase price remains at KRW 572.4 billion.
- Verify the status of regulatory approvals required for Aju Savings Bank to become a second-tier subsidiary.
- Monitor the integration plan for Aju Capital and Aju Savings Bank into Woori Financial Group's operations.
- Review the impact of the cash outflow on Woori Financial Group's liquidity and capital adequacy ratios.