The privatization of Woori Finance and Jeju Bank – the listed South Korean financial companies – by the Korea Deposit Insurance Corp faces hurdles because of a drop in the share price and lower demand, the Maeil Business reported.
The news report cited an unidentified insider at the state-run KDIC as saying that that the government body thinks it is diffiult to sell a large amount of shares in Jeju through the stock market.
KDIC plans to sell a 21.43% stake, or 4.72m shares, in Jeju as part of the privatization process.
An unsourced part of the report said KDIC is also likely concerned on the privatization plan of Woori as its share price has recently fallen to KRW 13,000.
The report estimated that Woori’s share price should at least be KRW 16,000 in order for KDIC to return its principal investment.
A report in Korea’s Edaily stated that the South Korean government is unlikely to sell Kyongnam Bank and Kwangju Bank, the unlisted subsidiaries of Woori Financial, prior to Woori’s privatization.
The report cited an unidentified insider at regulator Financial Services Commission as saying if the government sold the subsidiaries before Woori, it would take an year to sell them off, which would delay the divestment of Woori for too long.
Earlier reports suggested that Kyongnam Bank and Kwangju Bank could be put up for sale during the privatisation of Woori, so the latter could reduce its assets before it was sold off.
(Sources: Maeil Business, Edaily)
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