Hana Fnancial Group chairman Kim Seung-yu said Friday that his company would be able to agree with the U.S. Lone Star Funds to extend the deadline for the takeover of Korea Exchange Bank.

“We can draw a conclusion by next weekend,” Kim told The Herald Business, the sister paper of The Korea Herald.

The two sides are in talks to extend their May 24 deadline. Kim reportedly flew to Tokyo on Wednesday to meet senior officials of Lone Star to keep their 4.7 billion won ($4.3 billion) deal afloat while the financial regulator is delaying the approval on the deal.

“The two sides are in talks to fine tune details of the changed contract by next week,” a source told The Korea Herald.

The source said the two sides shared the understanding that they need to wait until the regulator approves the deal, adding that they would sign a deal soon.

The Financial Services Commission last Thursday deferred a decision on approval of the transaction, making it difficult for Hana, which has been accumulating over 4 billion won to purchase 51 percent of KEB from the U.S. hedge fund since November.

Under their current contract, either can walk away from the deal without penalty before May 24.

Chairman Kim earlier in the say said that he was “discussing details to push back the deal deadline” by the end of next week, according to news reports.

The deal with Hana is Lone Star’s third attempt to sell its majority stake at KEB after FSC withheld the approval of the sale to Kookmin Bank in 2006 and to HSBC in 2007.

Credit rating agency Moody’s said Thursday that the delay put on the proposed deal puts both at risk and especially KEB.

“We gave an A2 to KEB because one, their performance was good and two, we priced in the increased stability the KEB would have through a merger with Hana, a financially sound institution,” Choi Young-gil, a senior analyst at Moody’s said.

By Cynthia J. Kim (cynthiak@heraldcorp.com)