Auctions of 14 units to be completed by October 2014: regulator
Financial authorities on Wednesday publicized an undated project to privatize Woori Financial Group, which features three separate auctions by dividing the group’s 14 units into three packages.
The first package for the taxpayer-money-injected group consists of two provincial banks, the second is the securities unit plus five other sectors and the third is the flagship bank unit plus five other sectors, said the Financial Services Commission.
While the FSC plans to launch the sale process for the first and second bundles in the third quarter of this year (July and August, respectively), the sale of the third package is scheduled to kick off in January 2014.
The first batch is composed of South Gyeongsang Province-based Kyongnam Bank and South Jeolla Province-based Kwangju Bank. The two units take up 14.6 percent of Woori Financial in terms of assets.
According to market insiders, Busan-based BS Financial Group and Daegu-based DGB Financial Group are poised to vie for Kyongnam Bank for wider networks in the Yeongnam region.
For the Honam region, North Jeolla Province-based JB Financial Group, whose flagship is Jeonbuk Bank, is likely to bid for Kwangju Bank.
The second sale package is expected to draw extraordinary interest among potential bidders as it comprises the lucrative stock brokerage unit Woori Investment & Securities. It is the No. 1 player based on assets and the No. 2 based on equity capital in the Korean securities sector.
KB Financial Group, whose brokerage sector is relatively weak compared to its bank or credit card units, had expressed interest in the coming bidding for Woori Investment.
Among the others in the second batch are units for insurance, asset management, savings bank, capital service and IT-service provider.
The third package features the core unit Woori Bank, or the second-largest lender in the nation with assets of 266 trillion won ($230 billion), which account for 75 percent of the group’s total assets.
While the group plans to merge its holding company Woori Finance Holdings with Woori Bank before putting up at action, the others for the third targets involve the credit card unit and the financial research unit.
The FSC said it plans to complete the deal (or handing over shares to the preferred bidder) for the first package by May 2014, for the second by March 2014 and for the third by October 2014.
Under the Park Geun-hye administration, financial regulators shifted their position to sell Woori Financial’s subsidiaries on a “split-based” sale, from their earlier several attempts to push forward a block deal.
At a news briefing on Wednesday, FSC chairman Shin Je-yoon downplayed the worries that the government ― under the split sale plan ― may fail in maximizing the effect in its project to retrieve taxpayers’ money.
“We believe there will be not much difference (in the bidding prices) between the block sale and the split sale.”
The chief regulator added that foreign investors will also be eligible to participate in the auctions as long as their takeover plans do not go against the laws and regulations.
koreaherald@heraldcorp.com
