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Woori Financial to be sold off in single package

May 17, 2011 - 18:45 By 김연세
KDB said to be leading potential bidder for September sale of bank

The financial authorities announced Tuesday that the state-controlled Woori Financial Group would be handed over to an investor through a bidding competition by September.

The Public Fund Oversight Committee said that it would sell the nation’s largest financial group by assets in a “package deal.”

The official announcement came amid speculation that the state-run KDB Financial Group will finally take over Woori Financial. Committee officials neither confirmed nor denied the allegations.

“I believe it would be inappropriate for us to comment on it (a particular investor),” committee chairman Min Sang-ki told reporters.

“There remains sufficient time. I hope the principle of competition will be secured,” he said.

KDB Financial reportedly tops the list of potential buyers after Chairman Kang Man-soo flagged earlier in May his intention to jump into the takeover race.

KDB Financial’s takeover of Woori Financial would make the consolidated entity the biggest local financial group by far with combined assets of about 500 trillion won. KB Financial’s assets stood at 344 trillion won, and Shinhan Financial holds 328.6 trillion won.

The package sale unveiled by the committee means that the government is seeking to hand over all the group’s financial units simultaneously to a single preferred bidder, committee officials told a news conference.

Among the units are Woori Bank, Woori Investment & Securities, Kyongnam Bank and Kwangju Bank.

“A buyer is required to bid for a minimum 30 percent Woori Financial share (out of the 57 percent stake held by the state-run Korea Deposit Insurance Corp.),” Min said.

Min also said the committee decided to restart the stalled sale in order to quell market uncertainties and keep sale momentum afloat.

The KDIC will accept letters of intent to bid for Woori Financial by June 29 before getting the final bids in September, the committee said.

In a bid to draw more potential buyers, the Financial Services Commission will review a regulatory revision to allow financial holding firms to join the takeover race.

Through the revision, financial holding firms would reportedly be allowed to control another financial holding firm with a minimum 50 percent stake, lower than the current limit of 95 percent, the committee said.

The rule change is expected to lure gigantic financial holding firms like state-run KDB Financial Group and KB Financial Group.

President Lee Myung-bak vowed as part of his election campaign to privatize Woori Financial and other state-owned firms that were rescued from bankruptcies with taxpayers’ money in the aftermath of the 1997-98 Asian financial crisis.

By Kim Yon-se (