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Chohung Bank"s Capital Reduced at the Ratio of 9.3 to 1

Dec 17,1998
The government decided on December 17 that Chohung Bank, which will merge with the regional Kangwon Bank and Hyundai Merchant Bank, will declare a reduction of capital at the ratio of 9.3 to 1.
This will leave stockholders of Chohung Bank retaining only one share per 9.304 of the shares they currently own. Stockholders who oppose the decision can ask Chohung Bank to buy the retained stocks at a price that Chohung can decide on at a later date.
The government decided it had no choice other than to lower Chohung Bank's capital from 930.4 billion won to 100 billion won and pour 2.17 trillion won in public money so as to raise the bank's BIS capital adequacy ratio from the current 6.95 percent to 10 percent by the end of January, 1999.
Chohung Bank's fate was sealed when it failed to find a domestic or foreign partner to merge with.
In other banking news, the government intends to merge Chungbuk Bank into a newly merged bank, if Chungbuk Bank fails to induce enough foreign capital within the year.



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