Poor timing led to failure of Woori sale
The South Korean government fails in its most recent bid to sell off its majority stake in Woori Finance amidst challenging political and economic climates. August 07, 2012 | Lalitha SivanesanSouth Korea has again failed to sell its 57% stake, worth $5.2 billion, in Woori Finance, the country’s biggest financial group by assets. Possible bidders for the stake, which included Kookmin Financial Group, Kyobo Life Insurance as well as the MBK Partners-Korea Federation of Community Credit Cooperative partnership decided to bow out of the sale before the set deadline, rendering the auction invalid in accordance with the country’s regulations. Two previous efforts to sell Woori also fell through due to a lack of investor interest. Woori was originally established in 2001 as a holding company for banks that were bailed out following the 1998 Asian financial crisis, in an effort to clean up the country’s banking industry and improve competitiveness. Since then, the government has ploughed $11 billion into Woori, and has recouped $6 billion via share sales and dividends. The government is hoping to recover the remaining $5 billion of taxpayer money by divesting its stake in Woori. The sale of Woori is part of a broader plan by the current government to privatise financial institutions, and revitalise the country’s banking industry. Kim Seok-don, chairman of Korea’s Financial Services Commission (FSC), said "For Woori Finance to be valued fairly, it needs to strengthen competitiveness. And for competitiveness, it needs to be privatised as soon as possible." Political uncertainty ahead of Korea’s presidential election may have impacted the sale of Woori. A recent statement released by Park Geun Hye, South Korea’s leading presidential candidate, stating that the sale should be carried out by the next administration, seems to have negatively impacted the auction. The sale has also received underwhelming response from Korea’s blue chip financial firms, given the local banking sector’s wobbly performance and sliding stock values, with very few banks actually possessing the financial resources to conduct a multi-billion-do... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Mergers and Acquisitions, Regulation, South KoreaMergers and Acquisitions,riskregulation,south korea, Mergers and Acquisitions,Regulation,South Korea, Keywords:Woori, FSC, Kim Seok-don, Korean Financial Industry Union, Korea Development Bank, Kookmin, Park Geun Hye, Korea Exchange Bank, Lee Myung-bak Woori, FSC, Kim Seok-don, Korean Financial Industry Union, Korea Development Bank, Kookmin, Park Geun Hye, Korea Exchange Bank, Lee Myung-bak
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