Korea revives plan to sell state-run Woori Finance
Korea on Sunday invited bids for Woori Finance Holdings Co., the country's top banking group by assets, resuming the stalled process for privatizing the state-run company.
The move comes more than six months after the government suspended the sale of its 56.97 percent stake in Woori Finance due to a lack of interest among potential buyers. The state-run life insurer Korea Deposit Insurance Corp. (KDIC) owns the stake that is valued at about 6.3 trillion won ($5.56 billion).
The Public Fund Oversight Committee, which handles state asset sales, said it will receive preliminary bids for the government stake till July 27 and shortlist potential buyers before picking a preferred bidder. The committee, however, did not specify when it would select the prime bidder.
To facilitate the sale of the government stake, the committee said, it will seek to limit KDIC's voting rights and give the buyer more managerial autonomy. Prospective buyers will not be required to submit letters of intent before presenting preliminary bids, it added.
Under the plan, a buyer is required to bid for a minimum 30 percent share, the committee said, adding all Woori Finance subsidiaries, including two regional banks and the brokerage unit Woori Investment & Securities Co., will be sold to a single buyer.
Kim Seok-dong, chairman of the Financial Services Commission that has the committee under its wing, said he hopes a suitable buyer will be found.
"There is a chance of the stake being sold since Woori Finance's financial soundness and the market condition are better than last year," he said.
The government is eager to retrieve the 12.8 trillion won (US$11.8 billion) of public funds injected into the banking group in the aftermath of the 1997-98 Asian financial crisis.
The government first cut its stake in Woori Finance to 88.2 percent after selling a combined 11.8 percent interest in an initial public offering. It has since continuously reduced its stake via block sales.
After efforts to privatize the group were derailed by the 2008 global financial crisis, the government unveiled a plan to revive the sale in July 2010. The plan, however, hit a snag late that year after two prospective buyers withdrew their bids due to expensive premium costs.
In June last year, the government's plan to sell Woori Finance to KDB Financial Group Inc., another state-owned banking group, was also scrapped due to strong public criticism. (Yonhap)