South Korea: Hite Brewery’s shares on rise as the Jinro stake is given up

South Korea's top brewery extended recent gains after it announced on September 23 it would give up its majority control of liquor maker Jinro by selling a 10 percent stake to a Morgan Stanely fund for 250 billion won ($243 million), Reuters announced on September 27.

The sale significantly eased investors' concerns about how Hite would finance its $3.4 billion acquisition of the unlisted Jinro, the country's top liquor maker. Hite shares rose 4.62 percent on September 26. Hite would remain Jinro's biggest shareholder but the stake sale would allow it to repay maturing debt and strengthen its financial base, an official at Hite said on Friday.

The main index was down 0.07 percent. Shares in the fixed-line provider fell 2.93 percent to 13,250 won after South Korea's telecoms ministry barred the firm's broadband subsidiary, Powercomm, from taking on new customers until it correctly identifies itself to other service providers when exchanging Internet traffic.

The government said in a statement on Monday that Powercomm, 45.4 percent owned by Dacom, had been using Dacom's identification number instead, in breach of government guidelines. The measure could make it harder for Powercomm to hit its goal of capturing 7.5 percent of the local high-speed broadband market by 2006.

Powercomm entered South Korea's cutthroat broadband market in September. Shares in rival high-speed Internet service provider, hanarotelecom inc., rose 1.69 percent to 2,715 won.

The main index was down 0.29 percent. Shares in the top local card issuer surged 6.61 percent to 38,700 won, a day after local credit ratings agency Korea Ratings raised its rating on LG Card's unsecured senior bonds to A+ from A, citing a recovery in earnings and enhanced capital base.

The new rating has a positive outlook. LG Card said last week its August delinquency ratio, representing cards receivables and loans unpaid for more than one month, fell to 9.6 percent from 9.7 percent in July. The broader index was down 0.11 percent.

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