Tongyang in talks over insurer unit sale

Tongyang Group said Thursday that it is in talks with Vogo Investment to decide whether to abandon its right to buy back part of its stake in the group's life insurance unit from South Korea's indigenous private equity fund. In November last year, Vogo Investment clinched a deal to buy an additional 46.5 percent stake in Tongyang Life Insurance Co. from the group's affiliates, raising the fund's total holdings to about 60 percent. In a bid to ease the liquidity squeeze at its cement-making subsidiary, Tongyang Group sold the stake for around 900 billion won (US$795.4 million), but attached a condition to exercise an option to buy back 30 percent of the shares by 2015. "We are in talks with Vogo Investment to decide whether to drop the right to exercise a call option and to agree on the stake sale, but nothing has been decided yet," the group said in a regulatory filing. Market watchers said that the group's potential move to abandon the right is likely to expedite Vogo Investment's efforts to sell Tongyang Life Insurance, market watchers said. The group's securities unit holds a 3 percent stake in Tongyang Life Insurance.