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Thu, February 3, 2022 | 03:08
Hyundai Card seeks to go public next year
Posted : 2019-10-08 16:13
Updated : 2019-10-08 20:10
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Hyundai Card's headquarters in Yeouido, Seoul / Courtesy of Hyundai Card
Hyundai Card's headquarters in Yeouido, Seoul / Courtesy of Hyundai Card

By Kim Bo-eun

Hyundai Card has begun the procedure for an initial public offering (IPO), the card issuer confirmed Tuesday, adding that It had issued a request for proposals to select a lead manager, Monday. Bidders will have to submit their proposals by Oct. 22. The firm has no specific IPO timetable but is expected to be listed on the main bourse in 2020 at the earliest.

"We are reviewing an IPO based on the need to increase our capital base for long-term growth and to increase transparency," a Hyundai Card official said.

Hyundai Card's majority shareholder is Hyundai Motor, which owns almost 40 percent of its shares ― Hyundai Commercial and Kia Motors each own 24.5 percent and 11.5 percent.

In 2017, the Asia-based private equity firm Affinity Equity Partners, the Government of Singapore Investment Corporation, AlpInvest Partners and Hyundai Commercial acquired Hyundai Card's shares owned by GE Capital.

At the time, the card firm's value was estimated at 1.6 trillion won ($1.3 billion). Currently, its estimated value is around 2.5 trillion won.

The market view is that Hyundai Card would not seek to go public at this point if not for the financial investors, as the stock market has a pessimistic view of card issuers, which are struggling to make profits.

The firm is seen to be pushing for an IPO as financial investors usually seek retrieve their investment plus profits after five years.

Hyundai Card was established in 2001, after Hyundai Motor acquired Diners Club Korea and changed its name.

The card issuer carved a significant position in the competitive market through its credit card designs and marketing strategies appealing to young customers.

It introduced different color cards for high-end users and raised its brand awareness among the young generation through its sponsored concerts which invited big-name foreign musicians.

The card issuer saw its net profit grow in the first half of this year, amid tough circumstances for card firms based on a government imposed fee cut.

Its net profit for the first half of the year stood at 121.8 billion won, a 57.4 percent increase from the same period a year earlier.

This was in contrast to other card issuers. Shinhan, Samsung, KB Kookmin, Lotte, Woori and Hana which saw their profits shrink.

Hyundai Card ranked fourth out of seven card firms, in market share in terms of card expenditures in the first half of the year, taking up 15.2 percent.



Emailbkim@koreatimes.co.kr Article ListMore articles by this reporter



 
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