In a setback for South Korea’s financial sector, MG Non-Life Insurance’s latest attempt to secure a new owner has ended in failure, according to the Korea Herald.
The final bidding, which took place on Friday, saw no participants, despite the presence of potential buyers in preliminary rounds. Samjong KPMG, the lead advisor for the sale, reported that no entities attended the crucial final stage.
Notable prospective buyers, including local private equity firm Dayli Partners and the U.S.-based JC Flowers, who had expressed interest in earlier bidding phases, were absent from the final round. Current regulations stipulate that only companies that participated in preliminary bidding are eligible for the final bidding.
MG Non-Life Insurance, ranked as South Korea’s 10th-largest non-life insurer, is majority-owned by JC Partners, which holds a 95.5% stake. The insurer, designated as insolvent by the Financial Services Commission (FSC) in April 2022, has been under the management of the Korea Deposit Insurance Corporation (KDIC) for its public sale auction.
The KDIC’s previous two preliminary bidding attempts last year also ended unsuccessfully, largely due to concerns over the insurer’s deteriorating financial condition. The company’s solvency ratio, a key measure of financial health, fell to approximately 43% in the first quarter of this year, a significant drop from 77% at the end of the previous year. Financial authorities recommend maintaining a solvency ratio above 150% for sound capital health.
To restore MG Non-Life Insurance to a stable condition post-acquisition, an estimated $718.6 million is required. With the third sale attempt having failed, the KDIC is now contemplating the liquidation of the insurer.
