Hyundai Card's IPO bid comes to temporary halt amid Fubon's stake acquisition

Hyundai Card's headquarters in Seoul / Yonhap

By Lee Min-hyung

Hyundai Card's planned initial public offering (IPO) has come to a temporary halt after Taiwan-based Fubon Financial became one its new major shareholders, replacing a consortium led by Affinity Equity Partners, the card company said, Friday.

According to Hyundai affiliate, Fubon recently purchased a 19.98-percent stake in Hyundai Card from the Affinity consortium, a previous financial investor of the card company. Fubon is a global financial firm, the business areas of which include insurance, banking and securities.

Following the stake investment, Fubon has emerged as a major strategic investor in Hyundai Card.

"With Fubon joining as a new strategic investor of Hyundai Card, we will not consider going public for some time," a spokesman at Hyundai Card said.

Back in 2017, the Affinity consortium purchased a 24-percent stake in Hyundai Card ― worth 380 billion won ― from GE Capital under the condition that the Hyundai subsidiary would finish its IPO by 2021. The plan appeared to go smoothly after Hyundai Card designated NH Investment & Securities and Korea Investment & Securities as lead underwriters for the planned IPO.

But the plan hit a snag the following year with the outbreak of the COVID-19 pandemic, as that weakened investor sentiment in the card industry and financial industry overall.

Hyundai had to change its earlier plan by turning the much-anticipated IPO into a mid- to long-term goal.

The Affinity consortium then sold its 4-percent stake in Hyundai Card to Hyundai Commercial in August of last year. And with Fubon finishing purchasing Affinity's 20-percent stake in Hyundai Card this month, the Hong Kong-based consortium exited its position as a major financial investor in the card firm.

"With Fubon Financial becoming one of our major shareholders, along with Hyundai Motor Group, the financial group will participate in the management of Hyundai Card," the spokesman of the company said. "Fubon is known to have thought highly of Hyundai Card's growth potential in various areas, such as private label credit cards, data science and branding."

Hyundai Card did not specify when it plans to push for the IPO again.

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