Vogo invests W194bn in credit card issuer

The Korean buyout firm has acquired a 30.7% stake in BC Card and is looking to acquire a controlling stake in the company by the end of the year.

Vogo Fund, a South Korean buyout firm, has invested W194.4 billion ($156 million; €108.6 million) to acquire a 30.7 percent stake in BC Card, Korea's biggest credit card company, from Hana Bank and SC First Bank.

The firm will acquire additional stakes in the company and plans to be a controlling stakeholder in BC Card by the end of the year, Jason Shin, managing partner and co-founder of Seoul-based Vogo, told PEI Asia in an interview.

The investment is being made from Vogo Fund, a W500 billion fund raised from domestic investors, and its sister fund Korea Global, which raised $120 million from overseas investors, Shin said. 

Vogo was close to an investment in BC Card in March 2006, when it sought to buy out stakes held by the three largest shareholders in the company – Woori Bank, Chohung Bank and Hana Bank. However, the deal did not materialise as Yangho Byeon, one of the firm's co-founders, was then indicted for his authorisation of the sale of Korea Exchange Bank to Lone Star when he was a senior government official. He was subsequently cleared of all charges.

Separately, Vogo Fund is also set to make a partial exit from its investment in Tong Yang Life Insurance, which is readying for an IPO next month. The company plans to raise W440 billion through the IPO, according to Reuters.

Vogo invested W200 billion in Tong Yang in three tranches in the middle of 2006 for a 25 percent stake in the company, Shin said. The firm currently owns a 20 percent stake in the insurance company and is putting 5 percent of its holding (a 1 percent stake in the company) up for sale in the IPO.

The firm plans to wait to divest its remaining stake in Tong Yang. “We will time our exit once the company is publicly listed depending on the trading price and market conditions,” Shin said.