The loans are a solution to repay a few of the tax bill with out the household having to promote their intensive Samsung holdings, mentioned one of many sources, the chief govt officer of a monetary firm primarily based in Seoul with information of the discussions.
Two different financial institution officers with information of the matter additionally corroborated the household’s discussions, including that a number of banks had lined up for the enterprise as a result of the Lee household, South Korea’s richest, is taken into account a superb consumer.
The sources declined to be recognized as a result of the mortgage talks are thought-about confidential.
“The chances are excessive that they may hold the present shareholding construction with out promoting main stakes,” mentioned Kim Soo-hyun, an analyst at Shinhan Funding Corp.
The inheritance tax quantities to about 11 trillion gained ($9.9 billion) for the deceased Lee’s listed shareholdings alone, and the full taxes for the whole property together with artwork, actual property and money holdings are estimated to be 12 trillion to 13 trillion gained ($10.8 billion to $11.7 billion).
The Lee household is required to report back to the tax authorities the extent of the inheritance and the cost plan by the tip of April. Lee died on Oct. 25 with a web price estimated at about $20.9 billion.
South Korea’s tax code permits cost in instalments, with one-sixth of the full tax invoice to be paid first, then the remaining over 5 years at an annual rate of interest at the moment set at 1.2%. Even in instalments, greater than 2 trillion gained is predicted due yearly.
“The household has been discussing, for a substantial time period, stock-backed loans with a number of banks that primarily take care of Samsung corporations,” mentioned the monetary firm CEO.
“I perceive the whole quantity of the inheritance tax isn’t going to be raised like this, however mentioned together with different strategies.”
Dividends the household receives from their very own shareholdings, along with the deceased Lee’s shares, are additionally anticipated to go towards paying the tax, analysts at Mirae Asset Securities and Shinyoung Securities mentioned.
On April 16, Samsung Electronics paid out 13.1 trillion gained in year-end dividends, its largest single dividend payout ever, in response to firm filings. Of this, the Lee household’s portion was greater than 1 trillion gained, together with for Lee Kun-hee’s 4.18% stake in Samsung Electronics, and for son and inheritor Jay Y. Lee’s 0.7% stake.
The youthful Lee is at the moment serving a 30-month jail time period for bribery tied to former President Park Geun-hye.
South Korean enterprise tradition believes there may be advantage in retaining management positions inside the founding households of conglomerates, identified within the nation as chaebol, comparable to Samsung.
Due to this, a pro-business foyer group and others have argued for a pardon for Jay Y. Lee so he can resume his position as Samsung vice-chairman.