Chief of Woori sale committee prefers Middle East sovereign fund

By Kim Jae-won

The head of the Public Fund Oversight Committee (PFOC) said Monday he hopes a sovereign fund from the Middle East will buy a stake in Woori Bank for a long-term investment.

Park Sang-yong, a Yonsei University professor leading the eight-member government committee, said the committee is willing to sell part of the government’s 48.07 percent stake in Woori to a sovereign fund from the region. The PFOC is a deliberative body of the Financial Services Commission in charge of privatizing Woori.

“As we push for selling our Woori Bank stake to multiple buyers, we thought it would be great to have a Middle East sovereign fund because they are long-term investors that can support the management of the bank,” Park told The Korea Times.

The committee announced last month it will sell a 30 to 40 percent stake in the nation’s second-largest lender by assets to multiple buyers in smaller portions ranging from 4 percent to 10 percent, after failing to sell a controlling stake to a single bidder on four occasions previously.

Park said he prefers Middle East sovereign funds because they have invested in Asian markets for a long time. Sovereign funds in northern Europe also manage big amounts of money, but they are not interested in Asian markets, he added.

He did not elaborate on specific names of the funds, but market watchers said candidates will be the Abu Dhabi Investment Authority (ADIA), Dubai International Capital (DIC) and the Qatar Investment Authority (QIA) among others. Park visited countries in the Middle East in May, meeting officials from the funds.

The ADIA has been investing funds on behalf of the government of Abu Dhabi with a focus on long-term value creation since 1976. DIC is a Dubai-based international investment company with a primary focus on private equity in the Middle East and western European regions.

The QIA was founded by the State of Qatar in 2005 to strengthen the country’s economy by diversifying into new asset classes.

Woori has been losing competitiveness as its sales process has lingered on. The lender’s net profit tumbled 70.41 percent to 228.9 billion won in the second quarter from a year ago.

Shares of Woori closed at 9,500 won, down 40 won, or 0.42 percent.