South Korea’s Hyundai Marine & Fire Insurance Co Ltd (HMFI) has announced it will acquire a 25 per cent stake of VietinBank Insurance (VBI).

VBI will issue 16.7 million shares to HMFI to raise the Vietnamese insurer’s charter capital to VND667 billion (US$28.5 million). The deal is expected to be completed in the first half of 2019 after the Ministry of Finance approves in principle the charter capital change.

VBI held its annual general meeting of shareholders (AGM) to approve the capital hike plan through the private placement of shares to foreign investors.

According to the document submitted to the AGM, by June 2018, three foreign investors had sent official offers to VBI, expecting an acquisition. After consideration, Hyundai Marine & Fire Insurance Co Ltd (HMFI) was selected for negotiation of the deal.

The offer price will not be lower than the book value of VBI on December 31, 2017. Shares issued to foreign investors can not be transferred within 10 years of the completion of the offer, except for in some special cases.

The Korean investor requires that there should be at least one foreign investor on the Board of Directors who is not involved in management activities, to ensure the best support for VBI. This person will join VBI’s Board of Directors when the Ministry of Finance revises VBI’s licence to increase its charter capital and record foreign shareholders.

Hyundai Marine & Fire Insurance Co. Ltd. provides non-life insurance and other related insurance services in South Korea and internationally. It also engages in building and facility management, asset management, investment advisory, reinsurance brokerage and claims service businesses.

According to experts, foreign investors have decided to take part in the Vietnamese market thanks to its high growth. Viet Nam’s insurance sector has targeted revenue of VND129.24 trillion ($5.52 billion) this year, up 22.38 per cent against 2017. If it hits the target, it would be the fifth consecutive year the insurance industry has posted annual growth of more than 20 per cent. The industry’s total revenue surged by 21.2 per cent to VND105.61 trillion in 2017. — VNS