PE firms bid for South Korea’s Woori assets

After the process for offloading Woori's two regional banks started last month, now it is the turn of brokerage Woori Investment & Securities, which is being sold as a package with an asset management unit, a savings bank and a joint venture life insurance business with the UK's Aviva. Debt investment unit Woori F&I and leasing business Woori Financial are also on the block.

The auction process for Woori Bank, the group's flagship asset, is expected to begin early next year.

According to The Wall Street Journal, Woori F&I attracted more than 10 bidders, including The Carlyle Group, Hahn & Co. and IMM Private Equity. Daishin Securities confirmed it made separate bids for both Woori F&I and Woori Financial, with KB Financial Group thought to have done the same.

Pine Street Group - a Seoul-based private equity firm chaired by Yun Young-gak, former CEO of KPMG's Korea business - KB Financial and NongHyup Financial Group all said they had bid for Woori Investment & Securities plus its , which are together valued at $1.2 billion.

Woori was created by Korea Deposit Insurance Corp. in 2001 as part of a government-mandated consolidation of the banking sector, which was still struggling in the aftermath of the Asian financial crisis. It was a temporary solution that has now been in place for more than 10 years. All other significant financial assets that came under government control in the early 2000s have been divested.

KDIC once owned Woori outright but reduced its holding to 57% through an IPO and several block trades. The holding is worth around KRW6 trillion ($5.7 billion) at current market prices.

KDIC has made several attempts to exit its holding, with auctions for the entire asset failing in 2011 and 2012. A year earlier the sale was broken into several tranches, although 13 parties submitted bids, there was no credible suitor for 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 because the two other bidders dropped out. In 2012, the sale failed to attract any preliminary bids.

 

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• Topics
• Financials
• Buyouts
• North Asia
• Financial Services
• South Korea
• buyout