Korea Deposit Insurance Corp. to Sell off 10% Stake
The Korean government has finally wrapped up the privatization of Woori Financial Group.
The Public Fund Management Committee under the Financial Services Commission is to announce on Nov. 22 five or six companies that would take over a 10 percent stake in the financial group from Korea Deposit Insurance Corp. The new shareholders include Eugene Private Equity, KTB Asset Management, Align Partners, KTB Asset Management, and Woori Employee Stock Ownership Union.
Eugene PE is expected to acquire a 4 percent stake and the right to recommend outside directors. Dunamu, which offered the highest price of 14,000 won per share, is expected to receive a 1 percent stake. The rest of the investors are expected to each acquire a shareholding below 2 percent.
When the stake sale is completed, Woori Financial Group will be fully privatized in 20 years. Woori Financial Group is Korea's first financial holding company established in April 2001 by the government, combining the five insolvent financial firms, including Hanvit Bank and Peace Bank, where it injected public funds following the 1997 financial crisis.
At the time of its establishment, Korea Deposit Insurance Corp. owned a 100 percent stake, but it steadily sold its stake. Now it holds a 15.25 percent. This time it will sell a 10 percent stake, giving up its status as the largest shareholder. It will become the fourth-largest shareholder following the National Pension Service (9.80 percent), Employee Stock Ownership Union (8.38 percent) and IMM PE (5.57 percent).
Since the 1997 financial crisis, the government invested 12,766,3 billion won in Woori Financial Group, and has since steadily recovered public funds through the sale of subsidiaries and minority shares. The amount of funds that have not been recovered is 1,344,5 billion won.