By Kang Seung-woo
The government is poised to restart the stalled privatization of the state-run Woori Financial Group, despite the latest setback in selling its controlling stake, the nation’s top financial regulator said Wednesday.
In addition, it will seek the privatization of the Korea Development Bank (KDB) next year.
“It is disappointing that the deal fell through last week,” Financial Services Commission (FSC) Chairman Chin Dong-soo told reporters during a briefing.
“We will try our best to come up with a new plan and draw up measures to sell our share of Woori Financial as soon as possible.”
His remark came after the Public Fund Oversight Committee (PFOC) suspended its move for the sale of a 56.97 percent stake in Woori Financial, held by the Korea Deposit Insurance Corp. (KDIC), Friday, due to the absence of a valid bidder.
In November, 11 local and foreign prospective buyers submitted letters of intent (LOI) to buy part or the entire stake, but two Woori Financial-led consortia, the top-two prospective buyers, dropped out of the bidding, citing too high a price.
As a result, the PFOC, the country’s public fund watchdog, is expected to ease criteria for the sale, reflecting Woori’s protest against a substantial management control premium payment.
The chairman also said that the privatization of KDB is in the offing.
“In a way, the attempt to transfer KDB into private hands is a much tougher job than Woori, so we plan to set up a taskforce and seek ways and alternatives,” he said.
But he said the Industrial Bank of Korea (IBK) needs to remain a state-run lender to support small- and medium-sized enterprises (SMEs).
In response to Hyundai Group’s broken deal with creditors to buy top builder Hyundai Engineering and Construction (HE&C), Chin said that the FSC will investigate the nature and source of funds to be used to acquire state-controlled shares.
Creditors, headed by the Korea Exchange Bank (KEB) scrapped a stock transaction deal with Hyundai Group, selected as the preferred bidder last month, earlier this week after the group failed to verify its financing plans.
“The financial authority hopes takeover deals will be completed in the market without interference from the government. We intend to look more carefully into deals led by government-run institutions,” he said.