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Government to sell remaining stake in Woori

It has had the shares on its books since the 1997 financial crisis
June 26,2019
The government is set to unload its remaining shares in Woori Financial Holdings and hopes to have all the stock sold by 2022.

According to the Financial Services Commission (FSC) Tuesday, the 18.32 percent held by the Korea Deposit Insurance Corporation (KDIC) will be made available in two or three tranches starting in 2020.

The largest tranche could be equal to as much as 10 percent of the company’s equity.

“If there is no dramatic change in the situation, [the FSC] will push for the sale at regular intervals,” the regulator said in a statement.

“[The FSC] will adjust the amount of shares to be sold each time in the range of up to 10 percent, considering market demand,” it said.

The first round will be held in the first half of 2020, according to the statement.

To attract investors, the regulator will consider granting them the right to recommend an outside director at Woori.

The regulator said that the time is ripe for the sale attempt after the government managed to dispose of nearly 30 percent of Woori shares to a group of investors in 2016.

The Public Funds Oversight Committee saw it appropriate to embark on the sale given “Woori’s conversion into a holding company and the merger of subsidiaries into Woori Financial Group,” the FSC said.

The agency said that Woori being partially owned by the government increased risk and uncertainties for the financial group.

Although a source at the FSC said that foreign bidders are allowed to participate in the sale, observers believe that the government will likely prefer domestic investors due mainly to negative public sentiment towards foreign capital.

During the Asian Financial crisis in the late 1990s, the government poured 12.8 trillion won ($11.4 billion) into Woori Financial Holdings, although it has recouped 64.9 percent of it, or around 8.2 trillion won, through sales of subsidiaries and stakes.

The KDIC owned a 51.06 percent stake until 2016.

The sale in 2016 attracted multiple bidders and allowed the government to slash its stake.

The investors included Korea Investment & Securities, Kiwoom Securities, Hanwha Life Insurance, Tongyang Life Insurance and IMM Private Equity.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]