Thursday, October 24, 2013

South Korea Moves Closer to Selling Woori Finance



Woori Finance Holdings founded in 2001 after the Asian financial crisis of 1997-1998 when the South Korean government bailed more than five financial companies. Woori Finance Holdings is South Korea’s largest banking/finance organization by assets, which the South Korean government have attempted to sell its stake and failed in three attempts in as many years. However, the governments is now closer to offering its 57% stake after receiving the required minimum numbers of bids from regional and international  organizations. The South Korean government stake in the banking group is prized at $5.7 billion.
After considering the initial bids, the South Korean government abandoned its initial plan to sell its entire stake in the banking group in one batch to three batches. The three batches include Woori’s two regional lenders Kwangju Bank and Kyongnam Bank, which both received a total of seven bids. The second batch comprised of Woori’s brokerage unit (Woori Financial Co. and Woori-F&I Co.), where the government received approximately three bids prized at $1.65 billion. The third batch for sale that has not yet been launch is the group’s flagship Woori Bank
 
Most of the bids for Woori’s stake came from both international and local private equity
firms such as The Carlyle International Group and local firms such as the IMM Private Equity and Hahn & Co,. Other bidders included local brokerage companies KB financial and Daishin Securities, which aimed at diversifying its revenue collection base from their traditional brokerage fees. However, other bidders opted out of the contest as the competition pushed Woori’s stake higher than expected.

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