Hanwha wins dispute over Korea Life, plans IPO

SEOUL, Aug 1 (Reuters) - South Korean conglomerate Hanwha Group said on Friday that it had won a dispute in international arbitration over its purchase of a life insurer, enabling it to increase its stake in the firm and to prepare its initial public offering.

In 2006, Hanwha and a South Korean government agency filed applications with the International Chamber of Commerce (ICC) to arbitrate in a dispute over a 823.6 billion won ($813.6 million) deal for unlisted Korea Life Insurance Co.

The Korea Deposit Insurance Corp (KDIC), which oversees the restructuring and sale of companies bailed out with public funds, had said that its 2002 sale of 51 percent of Korea Life Insurance to a Hanwha-led consortium was flawed.

The agency had also rejected Hanwha Group's request in 2006 to exercise an option to raise its stake in Korea Life, the country's number two life insurance firm.

"The International Chamber of Commerce concluded that the share deal on Korea Life Insurance struck between the KDIC and Hanwha Group was legal," Hanwha said in a statement.

"With the ruling, the two-year dispute between Hanwha Group and KDIC has ended.. We will urge the KDIC to carry out our call option."

KDIC, which owns the remaining 49 percent of the domestic insurance firm, also said the arbitration agency ruled in favour of Hanwha, but declined to give its immediate reaction.

Hanwha's statement said that the group has cleared all hurdles to the Korea Life IPO after the insurance company cleaned up accumulated losses as the end of April, adding that it would kick off the offering process as soon as possible.

Hanwha Group, led by chemical and trading company Hanwha Corp (000880.KS), runs businesses ranging from construction to petrochemical production (009830.KS) and stockbroking (003530.KS).

($1=1012.2 Won)

(Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner)