The Korean government released the plan for the privatization of Woori Financial Group, earlier today.
A press release on the Financial Services Commission website states -
The Public Funds Oversight Committee has held the 22nd Meeting today to finalize its plans to sell the remaining shares of Woori Financial Group (WFG) held by the Korea Deposit Insurance Corporation (KDIC), where a consensus has been reached that after successfully making two block sales, once in November 2009 and once in April 2010, totaling 16% of WFG, bringing the total amount of shares held by the KDIC down to a 50% level, an appropriate condition has been set to finalize the privatization of WFG.
The privatization will be carried out with the three basic principles: maximising recovery of the injected public funds; making an early privatization; and contributing to sound and productive advancement of the financial industry.
Method of privatization
In line with the three basic principles, the sale of WFG shares will be done through two steps of open competitive bidding process by domestic and foreign investors; first, by primary bidding and second by final bidding.
Simultaneous sale of WFG and regional banks
Both the shares of WFG and the shares of regional banks held by WFG (Kyungnam Bank and Kwangju Bank) will be sold separately but up for the bidding at the same time.
Although the two regional banks are under WFG, it has been viewed as more effective to sell them separately due to them not having an integrated data processing network with WFG and with the low level of synergy effect. Moreover, because their value would be greater when sold separately taking into account their regional focused businesses. However, the bidding will be carried out simultaneously to prevent any delay in the overall privatization process.
The sale of regional banks will be for 50% plus one share or done through a complete merger. The actual amount of shares of WFG to be sold or whether it will be done through a merger will be determined and finalized with close discussions with the to-be-selected sales advisory firms.
….
Through the privatization process, the government hopes to sell all or most of remaining 57% of Woori Financial Group shares held by the KDIC to finalize the ten-year effort in its privatization since it was nationalized during the Asian financial crisis, at the same time, contribute to the advancement of Korea’s financial industry.
See here for all posts on the privatization of Woori Finance.
Source: FSC Press Release
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