A total of 18 institutional investors submitted letters of intent to buy splinter stakes in Woori Bank in preliminary bidding on Friday, boosting the chance of success of the government’s fifth attempt to privatize the state-owned bank, officials said.

According to the Financial Services Commission, the investors including private equity funds handed in the documents to the Korea Deposit Insurance Corp. as of 5 p.m.  The number was far higher than had been expected in the financial market.

The KDIC owns a total of 51.06 percent stake in the bank. The Public Fund Oversight Committee under the Financial Services Commission decided to sell 30 percent of the KDIC stake to multiple investors by dividing the stake into 4 to 8 percent chunks.

Hanwha Life Insurance, Korea Investment Holdings, Daou Kiwoom Group, IMM Private Equity and Vogo Fund have been confirmed to have completed the submission.

There have been rumors circulating in the financial industry that China’s Anbang Insurance Group was interested in the bidding, but its participation has not been confirmed yet. Some foreign private equity funds including ORIX and CVC Capital are said to have handed in their documents on Friday.

According to some local media, a sovereign wealth fund from Middle East formed a consortium with some Korean investors to bid for the bank, too. The consortium reportedly submitted the LOI on Friday, but the name of the fund is kept confidential.

Hanwha Life will buy a 4 percent stake in Woori as planned in order to create synergy with Woori Bank on the bancassurance business and expand its infrastructure for banking services as a major stakeholder of K-Bank, the country’s first web-based bank in the country that will be launched within the year.

Korea Investment Holdings also submitted the LOI on Friday. Market observers forecast the company is planning to buy an 8 percent stake in the bank. It is a leading stakeholder of Kakao Bank, another internet-only bank.

Kyobo Life Insurance that seriously considered taking over a 30 percent stake with the managerial rights of the bank in 2014 decided not to bid for it this time.

“From an investment point of view, there are stocks performing much better than the bank’s,” said a spokesman at Kyobo told the Korea Herald.

“The latest plan seems to be working after four failed attempts,” said an industry insider. “Already there are four investors bidding for 8 percent.”

The main bidding will take place in mid-November to select a preferred bidder.

The bank’s shares were traded at 11,350 won on Friday, up 1.34 percent from the previous trading session.

By Song Su-hyun
(song@heraldcorp.com)