NEW YORK — Shares of Hanmi Financial Corp. have soared this week following reports in the Korean media that Woori Finance Holdings Co. is looking to take a large stake in the company through a potential equity investment.
The investment, which is expected to be $100 million but is rumored to be as high as $200 million, is expected to come from South Korea-based IWL Partners, a company dedicated to buyouts of financial institutions, and its affiliate, Leading Investment & Securities Co.
A recent Korean media report, however, said Korea-based Woori would like a 51% stake in the investment, which Keefe Bruyette & Woods analyst Julianna Balicka said could smooth the regulatory pathway for a deal that has been stymied for months.
That said, Balicka stressed that the Korean media report appears to be highly speculative, and she cautioned that the investment is by no means a done deal.
"The euphoria exhibited by Hanmi shares in the last few days is really ahead of itself," she said.
Shares of Hanmi were recently up 19.5% to $2.01, adding to a 40% gain on Tuesday. The stock had been trading in the $1 range during the financial crisis as investors worried that the bank was close to failure.
Hanmi spokesman David Yang declined to comment on the reports in the Korean media. However, he did say that Hanmi's chairman, Joseph Rho, just made a visit to Korea, from which he returned earlier this week.
Hanmi said in a September regulatory filing that it was negotiating a $100 million equity investment from IWL Partners. That investment, which was expected to be completed by Dec. 31, 2009, would include investments that Leading Investment had already made into Hanmi.
The full investment has been held up by regulatory issues, which Balicka guessed were occurring because regulators would prefer if the investment came from a bank-holding company as opposed to a private-equity group. Therefore, regulators might look favorably on the potential involvement by Woori, a bank-holding company, she said.
A representative from Woori couldn't be immediately reached for comment.