Bloomberg’s ‘Korea Said to Prepare for Sale of More Woori Shares‘ article takes a look at the ongoing privatization of Woori Finance Holdings, and possible industry ramifications.
The article states-
South Korea is preparing for another block sale of shares in Woori Finance Holdings Co. as the government moves closer to privatizing the company, four people familiar with the plan said.
The share sale will be discussed when the Public Fund Oversight Committee meets on Jan. 27, said the people, declining to be named because the discussions are private. The committee also plans to approve the selection of sale arrangers for the shares in Woori Finance, South Korea’s third-largest financial company, one of the people said.
The size of the sale of shares in Woori will be similar to two previous transactions, two of the people said. State-run Korea Deposit Insurance Corp. raised 866 billion won ($754 million) by selling a 7 percent stake at 15,350 won apiece in November. The agency sold a 5 percent stake in June 2007.
Officials at the Public Fund Oversight Committee, Korea Deposit and Woori Finance declined to comment.
The government plans to reduce its 66 percent holding in Woori Finance under President Lee Myung Bak’s push to privatize lenders and boost the banking industry’s competitiveness.
The committee, which overseas sales of state assets, said on Dec. 18 it will seek a buyer to take a controlling stake after selling 16 percent in parcels.
The second half of the the article takes a look at the possible effects the privatization of Woori Finance could have on Korea’s financial industry –
The privatization of Woori Finance could trigger consolidation of the country’s banking industry, along with the sale of Korea Exchange Bank by Lone Star Funds. Woori Finance Chairman Lee Pal Seung told employees on Jan. 4 the company should play a key role in leading reorganization of the industry.
If the government decides to merge Woori Finance with another local lender, smaller Hana Financial Group Inc. is the most feasible candidate, Citigroup Inc. said in a Jan. 7 report, without citing the reason. Hana Daetoo Securities Co. named Woori Finance its “top pick” in a Jan. 11 report, citing the privatization plan.
KB Financial Group Inc., South Korea’s biggest financial company, and Hana Financial have both expressed interest in Korea Exchange Bank.
To read more about Woori Finance Holidngs’ privitisation see the previous post – Woori Finance could be merged prior to privatisation and for more information on Korea’s financial industry consolidation see – Prudential to sell Korean units soon.
(Source: Bloomberg, article edited for length)
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