IMM-backed consortium pays $2.1b for stake in Korea's Woori Bank

IMM will take a 6% interest in the bank. The other successful bidders are Tong Yang Life, Mirae Asset Management, Eugene Asset Management, Kiwoom Securities, Korea Investment & Securities, and Hanwha Life. The Financial Services Commission (FSC) said it received letters of intent from 18 prospective investors and this resulted in eight bids - all above the target price - being submitted.

The sale process for Woori Bank was launched in July of last year, after various other attempts to offload all or part of the government's 51.04% stake failed. The most recent of these fell through in December 2014 because only one group bid for the 30% controlling interest put on the block, alongside several smaller stakes. The FSC wanted to sell a 30-40% stake in blocks of up to 10% each.

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. A total of KRW12.8 trillion was plowed into Woori. KDIC ownership was intended as a temporary solution to help a sector struggling in the aftermath of the Asian financial crisis.

Woori Finance went public and KDIC trimmed its holding through several block trades. After initial attempts at an exit floundered because the government sought to sell all the Woori assets in one go, the auction was divided 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 interest because the two other bidders dropped out. Another sale in 2012 failed to attract any preliminary bids.

IMM closed its third Korea-focused fund last month at approximately KRW1.25 trillion.

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• Topics
• North Asia
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