Lone Star Sells 13.6% Stake in KEB

U.S.-based investment fund Lone Star Funds has sold a 13.6 percent stake in Korea Exchange Bank (KEB) for 1.19 trillion won ($1.28 billion) through a block sale, industry sources said Friday.

Lone Star Funds, with a 64.62 percent stake in South Korea's fifth-largest lender, sold 87.7 million KEB shares for 13,600 won each to local and overseas institutional investors overnight, according to Credit Suisse Group which arranged the sale.

The purpose of this sale was to pay down debt,"said LSF Chairman John Grayken."Lone Star still owns 51.02 percent of KEB and will continue to hold this investment for sale to a strategic investor."

"We are actively looking for a strategic investor who can take KEB to the next level,"he added.

The sale price was set at a 7.2 percent discount from Thursday's closing price of 14,600 won. KEB shares closed down 3.42 percent at 14,100 won on the Seoul bourse.

The sale price was set at a 6.8 percent discount from Thursday's closing price of 14,600 won. Lone Star Funds now holds 51.02 percent of the shares in KEB, they said.

Combined with 354.2 billion won Lone Star Funds received in dividends in February, it has so far retrieved 1.55 trillion won, or 71.8 percent of its total investment in KEB. The firm bought a 50.5 percent stake in the lender for 1.4 trillion won in 2003, and invested 2.2 trillion won in KEB in May last year.