Chairman Shin Chang-jae Acquires Up to 198,000 KRW per Share of Apalma Stake... Positive Signal for Put Option Dispute Resolution

Repurchase of 5.33% Kyobo Life Stake from Apalma Capital
Leverage for Ongoing Negotiations with Affinity Consortium

Shin Chang-jae, chairman of Kyobo Life Insurance, repurchased the shares of Apalma Capital, which invested in Kyobo Life Insurance in 2007, and reimbursed the investment funds. Shin's recent transaction is expected to serve as leverage to resolve the put option (the right to sell shares at a specific price) dispute with the Affinity Consortium.

According to the financial sector on the 9th, Apalma Capital recently sold a 5.33% stake in Kyobo Life Insurance to Chairman Shin for 216.2 billion KRW. The sale price was 198,000 KRW per share. Apalma Capital acquired Kyobo Life Insurance shares at 185,000 KRW per share in 2007 and exercised a put option in 2018, requesting Chairman Shin to repurchase the shares at 397,893 KRW per share. When Shin's side refused, Apalma Capital filed for arbitration with the International Chamber of Commerce (ICC) in 2019. After ongoing disputes, the conflict has now been resolved.

Shin Chang-jae, Chairman of Kyobo Life Insurance.

Chairman Shin is also continuing a put option dispute with the Affinity Consortium (Affinity, IMM Private Equity, EQT Partners, and the Singapore Investment Corporation). The Affinity Consortium acquired a 24% stake in Kyobo Life Insurance in 2012 at 245,000 KRW per share, totaling 1.2 trillion KRW. When Kyobo Life Insurance's initial public offering (IPO) did not occur, the Affinity Consortium exercised a put option in 2018 at 410,000 KRW per share. However, Shin's side rejected this, leading to ICC arbitration proceedings.

On December 17 of last year, the ICC arbitration panel ruled in the second arbitration that Chairman Shin must, within 30 days, have an external institution calculate the fair market price and repurchase the investors' shares accordingly. Kyobo Life Insurance recently selected EY Hanyoung as the external evaluation agency to determine the share price.

In this context, the recent transaction in which Apalma Capital settled its shares at about half the price of the previously exercised put option is expected to provide a clue for Kyobo Life Insurance to resolve the dispute with the Affinity Consortium favorably.