SEOUL, June 26: South Korea said it would put 14 units of Woori Finance Holdings up for sale by the end of next year, stressing that its fourth attempt to privatise the country’s largest financial holding company would be speedy and buyer-friendly.
As previous attempts by the government to offload its entire 57 percent stake, which is worth some $3.9 billion, have failed amid of a dearth of bidders, the new Park Geun-hye administration has decided to offer the company up in three batches.
South Korea has injected 12.8 trillion won ($11 billion)of taxpayers’ funds to bail out Woori since the Asian financial crisis in the late 1990s. The government has recouped a little less than half of that as of April.
‘This privatisation plan can return (Woori Finance) to the market speedily, in a way the market wants,’ Financial Services Commission Chairman Shin Je-yoon, the country’s top regulator, told a news conference.
The first stage of the planned sale would be putting the government’s 57 percent stakes in Woori’s regional affiliates Kyongnam Bank and Kwangju Bank up on the block. Those stakes are held through state-run Korea Deposit Insurance Corp. Sale notices would be posted in July, with the deals slated to close in the first half of 2014.
Next, Woori Finance Holdings would attempt to sell its controlling stakes in Woori Investment & Securities and five other units, including an insurance joint venture with Aviva Plc and an asset manager.
A final decision on whether to sell will be made next month after a new chairman recently took the helm at Woori Finance.
The units could be bundled or sold individually depending on demand. Sales notices would be posted starting August with deals expected in the first half of next year, the FSC said.
In the final stage, the Korea Deposit Insurance Corp will then attempt to sell a controlling stake in Woori Bank , which accounted for 81 percent of Woori Finance Holding’s net profit in 2012. It will also sell the remaining affiliates including a credit card company. The government hopes to close these deals by the end of next year.
Shares in Woori Finance Holdings rose 3.3 percent after the announcement on Wednesday, while brokerage unit Woori Investment & Securities Co Ltd gained 2.4 percent.
Nam Sang-koo, chairman of the Public Funds Oversight Committee overseeing the government recouping of taxpayer funds, said the deal structure was designed to widen the field of potential bidders by bypassing prohibitive rules on financial holding firm ownership.
Multiple potential bidders have expressed interest in the units, he added but declined to give names.
Although the sales will be open to foreign investors, analysts said bidders are expected to be predominantly local, adding that local players such as KB Financial Group Inc are more likely to be favoured by regulators.
($1 = 1160.1500 Korean won)
(agencies)
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