The sale of state-run Woori Finance Holdings Co. again fell through on Friday after no prospective buyer bid for South Korea's top banking group, thwarting the government's privatization plan for the third time.
The state-run Korea Deposit Insurance Corp. (KDIC) said in a statement that no preliminary bids were offered for Woori Finance. The KDIC owns a 56.97 percent stake in Woori Finance.
Earlier in the day, two prospective buyers of Woori Finance Holdings said they were withdrawing from the bidding, raising the possibility that the sale plan may falter again.
The consortia, one led by Kyobo Life Insurance Co. and IMM Private Equity and the other led by local private equity fund MBK Partners and the Korea Federation of Community Credit Cooperative, said they will not make a bid for Woori.
"We decided not to participate in the preliminary bidding for Woori since there are legal issues that restrict our takeover," said a spokesman for Kyobo Life Insurance, the country's No. 2 life insurer.
An official from the Korea Federation of Community Credit Cooperative also said its official position is not to join the preliminary bidding.
The consortia's withdrawal came after KB Financial Group Inc., South Korea's No. 2 banking group, decided to drop out of the bidding last week. KB Financial had been widely speculated as the most prospective bidder.
With the three potential buyers opting out of the Woori sale, the government's plan to sell 6.3 trillion won ($5.56 billion) worth of state-owned stake is on the verge of falling through for the third time.
The sale of Woori Finance has been pushed by the current administration as part of its broader plan to privatize financial institutions.
However it ditched the plan in 2010 due to a lack of interest among buyers, before it was again botched last year, as there was only one bid made by the MBK Partners consortium.
According to law, two or more buyers must take part in a bidding for a state-run company to make the sale valid.
In April, the government resumed the sale process, fixing the date for receiving preliminary bids due on July 27 before choosing a preferred bidder.
Korea injected 12.8 trillion won of taxpayers' money into Woori Finance in a bid to rescue the company from near bankruptcy. (Yonhap)