BC Card, a subsidiary of South Korean telecom giant KT, has reached an agreement to acquire a 10% stake in cash-strapped online bank K-Bank.
The credit card processing firm in its regulatory filing said it would acquire 22.31 million shares, which is equivalent to a 10% stake, in K-Bank from KT for $29.8m.
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This consists of 7.78 million common shares as well as 14.53 million redeemable convertible preference shares with non-voting rights.
Following the deal, BC Card will become the second-largest stakeholder in K-Bank after Woori Bank, which as of late 2019 held a 13.79% stake.
BC Card added that it will become the largest shareholder in the online bank by raising its stake to 34% by June 18.
The card company said that the deal is part of its strategy to ‘strengthen business synergy” with K-Bank.
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By GlobalDataA consortium led by KT launched K-Bank in April 2017. However, the telecom group failed to raise the stake in the online lender due to regulatory hurdles.
K-Bank, which was launched several months before rival Kakao Bank, struggled to gain much market share. It had to suspend loan service operations in April 2019 in absence of financing from KT.
KT owns 69.5% stake in the credit card company. Through the latest deal, the telecom company aims to double K-Bank’s capital base to KRW1.1 trillion.
