The financial authorities have been in trouble again in realizing the project to recoup taxpayers’ money by selling the state-controlled Woori Financial Group.

Though the Financial Services Commission had said it would accept letters of intent from potential bidders for Woori Financial by June 29, sales terms seem to be unattractive to local investors.

Research analysts issue the possibility that the sale process will be postponed again, following the case during the latter half of 2010.

They cite bidding prices that may be too high as one of the major hurdles under the current laws.

Under the situation that the government seemingly wants to sell Woori Financial to another financial group, bidding prices could exceed 10 trillion won ($9.25 billion) as a merger between financial groups requires trading of at least 95 percent stake.

Woori Financial, which comprises the flagship unit Woori Bank, is the nation’s biggest financial group by assets.

It would be difficult for major financial groups such as KB, Shinhan and Hana to raise funding as long as laws or enforcement ordinances are not revised.

Though the FSC is striving to revise the ordinances and lower the minimum stake level from 95 percent to 50 percent, a group of ruling and opposition lawmakers are moving to block the move.

Analysts predict the hurdle would continue unless some senior policymakers drop their ambition to launch a mega-bank in the nation though a block sale of Woori business units.

They also cite the government’s willingness not to hand over Woori to non-Korean investors though it has promised to offer equal opportunity for the coming bidding of which deadline is June 29.

Now a variety of merger scenarios are being issued in the market after FSC Chairman Kim Seok-dong said Tuesday that it would ban from the KDB Financial Group from participating in the bidding.

The scenarios include Woori plus KB Financial and Woori plus Hana Financial while chairmen of the two groups said they were not interested in the bidding.

Further, though FSC Chairman Kim Seok-dong has stressed that he would induce competition among potential investors for the planned bidding of Woori Financial, there is no financial group, excluding KDB Financial, which has expressed interest.

But following Kim’s comment on unfavorable public opinion toward a merger between two state-run groups, a similar scenario going against privatization of Woori and KDB has emerged in the market.

KDB Financial Chairman Kang Man-soo told lawmakers on Wednesday that he would focus on the state-run Industrial Bank of Korea as an M&A substitute.

His remarks embarrassed lawmakers and IBK officials. There are also predictions that KDB would seek to acquire Korea Exchange Bank.

Aside from the planned sale of Woori Financial, the FSC chairman said the regulatory body would map out the project to privatize KDB Financial while the latter had sought privatization after acquiring Woori.

By Kim Yon-se (kys@heraldcorp.com)