The Ministry of Strategy and Finance said Wednesday that it has sold part of its share in the state-owned Industrial Bank of Korea to domestic and foreign institutional investors via block trade.

It sold a total of 23.24 million shares, or 4.2 percent, of IBK, at 11,400 won ($10.70) per share evenly to foreign and domestic investors, the Finance Ministry added.

The shares sold at a 5 percent discount on Tuesday’s market closing price of 12,000 won per share, it noted. The sale amounted to 265 billion won.

Following the sale, the Finance Ministry now has a 64.6 percent stake in the bank for small and medium enterprises.

The government has been trying to privatize the bank since 2006 but to no avail.

The Finance Ministry said that it sold its shares above initial expectations of about 150 billion won, and that its equity liquidation will help it narrow the shortfall in tax revenue this year.

It also said that its IBK privatization plan is in full gear.

“This marks the first time the government has sold some of its IBK shares since it embarked (on the privatization of the bank) in 2006,” the Finance Ministry said in a statement.

“This will contribute to reducing its tax revenue shortfall and pave the way for further sales of its remaining shares,” it concluded.

The government has injected an additional 1.4 trillion won of public money into the Industrial Bank of Korea since 2008 as a means of buffering the bank against SME loan losses stemming from the global financial crisis.

The Finance Ministry’s stake in the bank increased from 57.7 percent to 68.8 percent following its liquidity injection.

It said that the sale also was part of efforts to retrieve its funds for the public.

The government will move to sell its IBK shares again via block trade possibly in March next year, with the aim of unloading more than 50 percent of its holdings and retrieving around 1.7 trillion won.

By Park Hyong-ki (hkp@heraldcorp.com)