SEOUL, July 23 (Yonhap) -- Tongyang Life Insurance Co. said Friday it sold its entire stake in major financial holding firm Woori Financial Group Inc. as part of efforts to bolster its balance sheet.
The insurer said its board decided to sell its 3.74 percent interest in Woori Financial Group, or 27.04 million shares, to some 60 domestic and foreign institutions, for 301.5 billion won (US$262 million).
The proceeds translate into 9.7 percent of its equity capital worth 3.93 trillion won, it added.
Tongyang Life Insurance is known to have posted a 3 percent return, including dividends, on the stake that it acquired in December 2016.
Currently, the state deposit insurer Korea Depository Insurance Corp. holds the largest stake of 15.25 percent in Woori Financial Group, with other major shareholders including the National Pension Service.
A company official said the stake sale is designed to secure a capital buffer in the runup to the implementation of new capital requirements for local insurance companies.
Under the current rules, Tongyang Life Insurance's risk-based capital (RBC) ratio came to 221.2 percent as of end-March, far lower than the industry average of 273.2 percent.
The RBC ratio -- the actual solvency capital divided by the minimum solvency capital required -- measures an insurer's ability to absorb losses and pay insurance money to policyholders.
Tongyang Life Insurance is controlled by Dajia Insurance Group, China's state insurance company.