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Biz News Korea(Eng)
MG Non-life Insurance to increase equity capital by $89 mn
- Collected
- 2017.06.09
- Distributed
- 2017.06.12
- Source
- Go Direct
According to insurance industry sources on Thursday, MG Non-life Insurance will hold a board of directors meeting within this month to vote on recapitalization plan by issuing new shares worth 100 billion won. The shares reportedly will be privately placed to its largest shareholder and local private equity Jabez Partners Co. Jabez will receive matching funds from Korea Federation of Community Credit Cooperatives (KFCC), the private equity’s largest contributor.
The KFCC took over MG Non-life Insurance in 2013 and since then has injected a total of 400 billion won into the insurance firm through equity purchase.
MG Non-Life Insurance’s ratio of risk-based capital (RBC) requirement, the minimum capital financial institutions must hold to protect investors and clients, hovered at 118.69 percent as of the end of March. The recommended RBC ratio set by Korea’s Financial Supervisory Service for insurance firms is 150 percent or above. Local commercial banks including KEB Hana have stopped selling MG Non-Life Insurance’s high-value insurance plans that go beyond 50 million won covered by state guarantee.
The non-life insurer hopes the equity increase will bump up its capital ratio.
The company posted a net profit of 2.3 billion won in the first quarter.
By Park Joon-hyung
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