Plan to privatize group may not be hampered by political considerations


Woori Financial Group chairman Lee Pal-seung said that the financial company will resume the stalled plan to sell state-owned shares in the first half of 2012.

Lee told reporters Thursday that “policymakers are actively preparing for the resumption. The method will be welcomed among market participants.”

He also stressed that the sale project should be a financial issue, not be handled by political powers. Parliamentary elections and presidential election are slated for April and December next year.

Like his remarks, the Public Fund Oversight Committee, under the wing of the Financial Services Commission, is reportedly poised to put Woori Financial for auction again in the coming months.

On the same day, FSC chairman Kim Seok-dong shared Lee’s view that it is necessary to push ahead with the sale process again.

“Members of the PFOC have newly been selected. Prior procedures are underway.”

But the top financial regulator said timing and methods have yet to be decided.

The remarks by the two figures come after a group of lawmakers’ recent request to Korea Deposit Insurance Corp., the biggest shareholder of Woori Financial, to submit a new plan to sell most of its stake in the group.

Last month, some members of the National Policy Committee of the National Assembly called for the state-run KDIC to report to the Assembly measures to recoup taxpayers’ money by accelerating the sale of the group by the first quarter of 2012.

Financial authorities, or the FSC and the PFOC, had to suspend the sale twice ― in the second half of 2010 and the first half of 2011 ― as they failed to attract competitive investors.

The bidding price, which was projected to be too high, was one of the major hurdles under current laws, according to analysts.

In the scenario that the government wants to sell Woori Financial to another big financial group, bidding may exceed 10 trillion won ($8.77 billion) as a merger between financial groups requires trading of at least a 95 percent stake.

Woori Financial, which comprises the flagship unit Woori Bank, is the nation’s biggest financial group by assets.

Analysts expect it to be difficult for major financial groups such as KB, Shinhan and Hana to raise funding as long as laws or enforcement ordinances are not revised.

Though the FSC had sought to revise the ordinances and lower the minimum stake level from 95 percent to 50 percent, some lawmakers reportedly blocked the move in the first half of 2011.

“The hurdle will continue unless some senior policymakers drop their ambition to launch a mega-bank in the nation though a block sale of Woori business units,” a banking research analyst said.

The KDIC took over Woori Finance in 1998 after injecting 12.8 trillion won in public funds to bail out Woori Bank.

By Kim Yon-se (kys@heraldcorp.com)