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Hyundai Card prepares for possible IPO

Hyundai Card, the credit card unit of Hyundai Motor Group, is seeking underwriters and advisers for a proposed initial public offering, its spokesperson said Tuesday.

“We have approached domestic and foreign financial institutions as part of the listing process,” the firm’s spokesperson Ha Young-jin told The Korea Herald. 

(Hyundai Card)
(Hyundai Card)

“But right now it’s difficult to say whether we will proceed with the plan. An IPO would be an opportunity to expand our capital and bolster transparency.”

The firm expects to get a response from interested parties by Oct. 22, although the company did not reveal details or the timeframe of the IPO.

Industry watchers believe Hyundai Card is valued at around 2.5 trillion won ($2.2 billion) and is considering an IPO to provide an exit route and help recover investments of its private equity fund investors. They project the company to debut on the benchmark Kospi next year, if such investors agree to exit following an average holding period of four to five years.

In 2017, Hong Kong-based Affinity Equity Partners, Singapore’s sovereign wealth fund GIC and Carlyle Group subsidiary AlpInvest purchased nearly 10 percent, 9 percent and 5 percent stake, respectively, from GE Capital.

The deals put an end to the 12-year-old business partnership between Hyundai Motor Group and GE Capital for the launch of two joint ventures -- Hyundai Card and Hyundai Capital -- in 2004.

Hyundai Card’s largest shareholder is its sister company and the nation’s No.1 automaker Hyundai Motor with a 36.96 percent stake.

The carmaker mentioned possible listing plans for Hyundai Card in its semiannual report released in August.

If Hyundai Card confirms its IPO debut, it will be the nation’s second card issuer to go public after Samsung Card in 2007.

But there are also concerns surrounding the IPO plans, with the nation’s credit card market weighed down by the government’s decision to cut card processing fees.

Hyundai Card’s operating profit fell 22 percent to 202.3 billion won on-year in 2018.