S Korea puts largest bank group for sale again

SEOUL - Agence France-Presse

Privatization is a signature policy of President Lee Myung-Bak’s administration. REUTERS photo

South Korea said yesterday that it is putting its six trillion won ($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 today 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.