Sale of gov't shares in Woori on track

By Kim Bo-eun

Woori Financial Group's headquarters in central Seoul / Courtesy of Woori Financial Group

Financial authorities are preparing to sell off Woori Financial Holdings' shares owned by the government this year and are carefully monitoring market circumstances.

The Financial Services Commission (FSC) said earlier it would push for the sale of the state-run Korea Deposit Insurance Corp. (KDIC)'s 17.25 percent stake in Woori over the next three years.

The authorities said they could not proceed with the plan in the first half of the year due to the spread of COVID-19. Woori's share price plummeted in mid-March amid the coronavirus-triggered stock market plunge.

Woori's stock price rose above 10,000 won briefly in June. That raised expectations authorities would speed up efforts to sell the shares while prices were up. However, the price fell in following weeks and now hovers around 8,500 won per ordinary share on the KOSPI.

The authorities plan to move forward with the plan.

"We will proceed with plans if market circumstances become favorable," an official with the FSC-affiliated Public Funds Management Committee (PFMC) said, Tuesday, referring to Woori's share price and the emergence of buyers.

Regarding the minimum price Woori's shares would have to reach, she said, “We have not set a limit as the sale will be up to a buyer that is intent on purchasing the shares.”

KDIC said Tuesday it was reaching out to potential buyers.

KDIC is said to be seeking to sell the shares via a block deal, under which the transaction takes place through a separate trading window, at an agreed price between the parties.

"The government committee is the entity that decides on the details of the sale," a KDIC official said.

He said investment banks JP Morgan, Samsung Securities and Mirae Asset Daewoo had been chosen as managers for the deal in 2009. The sale of government-owned shares of Woori has been attempted several times since the government poured funds into Woori Bank during the Asian financial crisis in 1997.

The funds amount to 12.8 trillion won, of which 11 trillion won has been retrieved.

Calculations show that Woori's price per share needs to be 12,350 won for the government to retrieve the remaining amount at 1997 prices. The government is considering selling the shares regardless of price moves.

The PFMC will regularly hold meetings on the fourth Monday of each month. The PFMC official said the meeting for August was cancelled due to the resurgence of COVID-19 in recent weeks. The last meeting was in July.

Key points regarding KDIC's shares in Woori will likely be discussed at the upcoming meeting this month.

Apart from KDIC, other major shareholders of Woori include the National Pension Service which holds 8.37 percent, the employee stock ownership association with 6.3 percent and IMM Private Equity with 5.98 percent.