Business Context and Reporting Period
This Form 6-K filing by Woori Finance Holdings Co., Ltd. (WFH) covers the month of June 2008, with a decision date of June 16, 2008. The report details two significant investment decisions involving capital increases in WFH's subsidiary banks, Kyongnam Bank and Kwangju Bank, aimed at strengthening their capital adequacy ratios to support regional business operations.
Key Financial Metrics and Investment Details
WFH reported Shareholders' Equity of 13,062,368,341,183 Won at the time of these decisions. The filing outlines specific investment amounts and ownership structures for two subsidiaries:
- Kyongnam Bank: WFH agreed to acquire 6,249,994 new shares for 99,999,904,000 Won. Post-acquisition, WFH's ownership is projected to reach 99.99% (58,049,994 shares). The investment represents 0.77% of WFH's shareholders' equity.
- Kwangju Bank: WFH agreed to acquire 5,333,333 new shares for 79,999,995,000 Won. Post-acquisition, WFH's ownership is projected to reach 99.99% (49,413,333 shares). The investment represents 0.61% of WFH's shareholders' equity.
Historical financial data for the subsidiaries (in millions of Won) indicates growth in assets and equity:
| Bank | Metric | FY2007 | FY2006 | FY2005 |
|---|---|---|---|---|
| Kyongnam Bank | Total Assets | 19,207,226 | 16,544,185 | 14,019,729 |
| Net Profit | 160,974 | 154,958 | 132,678 | |
| Shareholder's Equity | 923,417 | 794,979 | 694,315 | |
| Kwangju Bank | Total Assets | 15,286,827 | 13,926,797 | 11,680,675 |
| Net Profit | 112,652 | 90,118 | 124,685 | |
| Shareholder's Equity | 715,636 | 627,306 | 566,786 |
Material Changes and Outlook
The primary material change is the planned capital injection totaling approximately 180 billion Won into two regional subsidiaries. The scheduled dates for the issuance of new shares are July 4, 2008, for Kyongnam Bank and July 3, 2008, for Kwangju Bank. The filing does not provide specific forward-looking guidance on revenue or profit margins for the holding company, nor does it detail liquidity or debt metrics for WFH beyond the equity figure used for ratio calculations.
Risks and Contingencies
The filing notes that the final number of shares acquired and the resulting shareholding percentages are subject to change depending on the subscription results of the capital increases by other shareholders. Additionally, the decision date cited (June 16, 2008) corresponds to the payment of the subscription price, while the acquisition date corresponds to the issuance of new shares.
Key Facts for Investor Verification
- Verify the final subscription results of the capital increases to confirm the exact post-acquisition shareholding percentages for Kyongnam Bank and Kwangju Bank.
- Confirm the completion of the share issuance on the scheduled dates of July 3 and July 4, 2008.
- Assess the impact of the 180 billion Won capital outflow on WFH's overall liquidity and cash flow position.
- Review subsequent filings to determine if the capital injections successfully improved the subsidiaries' capital adequacy ratios as intended.