Korea launches another attempt to sell Woori Bank stake
The South Korean government is once again trying to sell its controlling stake in Woori Bank, this time dividing the asset into multiple tranches so that there is no one dominant shareholder.
The Financial Services Commission said in a statement that it planned to sell a 30-40% interest in blocks of up to 10% each. The government owns 51.04% of Woori Bank and it committed to retain 2.97% of that for another 18 months in order to fulfill a call option granted to bank employees.
It is understood that domestic pension funds and private equity funds are among those to have expressed an interest in the asset.
The previous attempt to exit Woori Bank fell through last December because there were not enough bidders - only China's Anbang Property & Casualty Insurance submitted an offer. A 30% controlling stake was put up for sale plus several smaller stakes. While there was demand for the smaller stakes, Anbang had no competitors for the larger piece.
Woori Bank is the flagship asset of Woori Finance Holdings, in which Korea Deposit Insurance Corp. (KDIC) held a 57% interest. KDIC created Woori in 2001 as part of a government-mandated consolidation of the banking sector and then trimmed its holding through an IPO and several block trades. It was intended as a temporary solution to help a sector struggling in the aftermath of the Asian financial crisis.
After several failed attempts to sell all the Woori assets in one go, last year the government divided the auction into three parts: two regional banks; brokerage Woori Investment & Securities in a package deal with an asset management unit, a savings bank and a joint venture life insurance business, and then debt investment unit Woori F&I and leasing business Woori Financial; and finally Woori Bank.
According to auction rules, there must be at least two bidders for the sale of a government-owned stake in a financial institution to go ahead. A consortium led by MBK Partners was thwarted in the 2011 auction of the Woori Finance Holdings interest because the two other bidders dropped out. Another sale in 2012 failed to attract any preliminary bids.
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