SEOUL — South Korea said Sunday it is putting its six-trillion-won (US$5.3 billion) majority stake in the nation’s biggest financial group up for sale, its third attempt to privatize Woori Finance Holdings. The Financial Services Commission (FSC) cited a better financial environment to attract bidders for its 57-percent stake after sale attempts in 2010 and 2011 failed for lack of interest. The government will issue the sale notice Monday and accept initial bids by July 27. It will choose a preferred bidder after accepting final bids later this year, the commission said in a statement. Potential buyers must bid for at least 30 percent of Woori. The government’s stake is held by the Public Fund Oversight Committee, which oversees companies bailed out by the state. The government this time stressed that a merger is also a strategic option.
“Overall conditions to sell Woori are improving. Recent revision of the related law enables a wider range of merger strategies for potential strategic investors,” the commission said.
Growing competition among local financial holding firms would likely lead to increased interest in Woori, it added. A local media report has said the cash-rich KB Financial Group seems the likeliest candidate if Woori is to be merged. Such a move would fit the government’s strategy of creating a megabank to compete globally. But KB Financial Chairman Euh Yoon-dae played down such a possibility last week, saying his group could not afford to buy Woori. Privatization is a signature policy of President Lee Myung-bak’s conservative administration, which ends its term next February. The government injected 12.8 trillion won of public money into the banking group in the aftermath of the 1997-98 East Asian financial crisis. It first cut its stake in Woori Finance to 88.2 percent after selling a combined 11.8-percent interest in an initial public offering. It has since further cut its stake through block sales, retrieving a total 5.6 trillion won. The FSC said it was hopeful of success at the third attempt. “I do see the success chances,” its Chairman Kim Seok-dong told reporters. “This is a mega deal you won’t see in Korea in coming years.” Woori Finance had 312.8 trillion won in assets as of end-2011.