SEOUL, June 5 (Reuters) - South Korea’s government may sell as much as 30 percent of state-owned KDB Financial Group in a $5 billion initial public offer, three times the amount it originally planned to sell, in defiance of gloomy global markets, the firm said on Tuesday.
The global IPO market has stalled over the past few weeks, as major stock markets have slumped to fresh 2012 lows on fears of a break-up of the euro zone. In Asia alone last week, five major IPOs were postponed or pulled.
However, KDB Financial Group Chairman Kang Man-soo said a less crowded IPO market could play in KDB’s favour and that the government was now looking to sell 10 to 30 percent of the company, which could raise up to 6 trillion won ($5.1 billion).
The firm seeks to go public in October or November.
“I think that outside South Korea, initial public offerings worth investing in would be scarce,” Kang said, adding that investors had shown interest in investing in its offering during his visit to Qatar and United Arab Emirates in late May.
At $5.1 billion, the offer would join two other big state-backed IPOs still in the Asian pipeline. China plans to raise up to $6 billion by listing insurer PICC Group and Malaysia may fetch $3 billion from the IPO of palm plantation operator Felda.
IPOs from state-owned entities have so far proven to be less sensitive to market volatility, given they often command the support of state-backed fund investors and are sometimes driven as much by political agendas as financial considerations.
In KDB’s case, the government will remain as the biggest shareholder after the IPO and will continue to offer a state-guarantee to its debts.
Worldwide, though, money raised from IPOs has slumped 46 percent so far this year compared with the same period of 2011, with investors wary of global economic risks and additionally cautious after last month’s botched Facebook offer. (Reporting By Jungyoon Lee; Editing by Mark Bendeich)