SEOUL (Reuters) - Hyundai Card, the credit card unit of Hyundai Motor Group, said on Tuesday it has asked banks to submit proposals this month for roles in a possible initial public offering.
The deal could value Hyundai Card at around 2.5 trillion won ($2.1 billion) and is intended to help investors such as Affinity Equity Partners, GIC and AlpInvest exit the firm, the Maeil Business Newspaper said.
"We are considering an IPO to expand capital in a stable manner and enhance management transparency," a spokesman at Hyundai Card said, adding it expects to receive the proposals by Oct. 22.
Hyundai Motor, South Korea's top automaker, is Hyundai Card's biggest shareholder with a 36.96% stake. Affinity Equity Partners has 9.99%, GIC owns 9% and AlpInvest has 5% - each having bought their stakes from General Electric (NYSE:GE) in 2017.
Hyundai Card, which is led by Ted Chung, brother-in-law of Hyundai Motor Group heir apparent Euisun Chung, saw its operating profit fall 22% to 202.3 billion won last year.
The company warned in August that it will be difficult to improve profitability significantly this year, citing an uncertain economic outlook and government measures to curb high household debt.
It said the country's credit card market is a mature one, with credit card payments accounting for 70% of total payments and that competition is intensifying from banks.