South Korea announced a fresh plan Tuesday to sell state-run Woori Bank following four previous failures to put the country's third-largest lender into private hands, a state committee said.
  

The government has been trying to sell its 51.04 percent stake in the bank since 2010 in a bid to recover public funds of some 13 trillion won ($11.3 billion) injected to bail it out following the Asian financial crisis in the late 1990s.  
  

The latest sale plan is its fifth bid as four previous auctions fell through due to a lack of bidders, including the latest attempt where only one company had submitted a bid in November last year.
  

The Public Fund Oversight Committee, a government-run body in charge of privatizing Woori Bank, said it will take a two-track approach to sell the stake held by the state-run Korea Deposit Insurance Corp.
  

Under the latest sale scheme, a 48.07 percent stake will be put up for auction, with the remaining 2.97 percent to be left for future call options, said the PFOC.
  

Of the to-be-auctioned stake, up to a 40 percent stake will be sold to either a single buyer or multiple investors, while the rest will be left for smaller investors.
  

The PFOC said it will take an open approach either to produce a single major shareholder or multiple shareholders who collectively wield their voting power.
  

A company can buy a controlling 30 percent stake in Woori Bank, otherwise, a group of investors can bid for a 4 to 10 percent stake each to constitute oligopoly shareholders.
  

The committee said a non-financial company can participate in the Woori Bank auction as long as the local banking law permits.
  

South Korea's current banking law allows a non-financial company to hold 4 percent in a bank with voting rights, while it needs approval from the Financial Services Commission to own another 6 percent on the condition that it gives up voting rights.
  

The minor part of the stakes, which can be up to 18.07 percent, will be sold in a separate auction in the future when Woori Bank's stock price rises to an appropriate level.
  

"We will push for the sale as soon as possible if the market condition matures, though market research showed that there is not sufficient demand for Woori Bank," said PFOC Chairman Park Sang-yong.
  

But he said the "matured condition" does not mean that the government will postpone the sale until Woori Bank's stock price reaches about 13,500 won. The Financial Services Commission, the top financial regulator, had earlier mentioned that the appropriate stock price to recoup the bailout money is 13,500 won.
  

"We just released the plan to boost the momentum of its privatization and also prop up its share price," said Park. "But we don't set the minimum line, or price floor."
 

Shares of Woori Bank closed at 9,040 won on the Seoul bourse at 10:40 a.m., up 1.23 percent from the previous close, with the benchmark KOSPI gaining 0.5 percent.

It is the first time for South Korean financial authorities to adopt the so-called oligopoly frame in the local financial industry, under which multiple shareholders will collectively control the board of directors.
  

In its earlier sale bids, the government had tried to sell the entire stake to a single entity but it failed to attract any eligible bidders for the mega-sized bank.
  

In November, it came up with a new plan to sell a controlling 30 percent stake to a single buyer with the rest going to minor investors.
  

"This is the first attempt in Korea to set up multiple major shareholders in a financial company," Park said. "So there are many things to check and prepare. The PFOC and KDIC will design a detailed schedule in the coming months."
  

The PFOC chairman also noted that the government will not intervene in Woori Bank's management after the bank is privatized.
  

"Many investors are worried about possible government intervention as it has done for more than 10 years," he said. "We will make efforts to shrug off such concerns and help raise the corporate value."
  

Woori Bank, with 300 trillion won in assets, was established in 2001 with the merger of five troubled banks in the aftermath of the Asian financial crisis that put South Korea on the brink of default.
  

Market watchers said the plan to attract a number of investors is the best option that the financial regulator can choose.
  

"The method is highly likely to succeed," said professor Kim Sang-jo from Hansung University. "Many investors want to buy a some 4 percent stake in one of the four biggest local banks in South Korea for a reasonable price."
 

But he said investors are still doubtful about the government's will to sell Woori Bank as the current stock price cannot guarantee the full recovery of the bailout money.
  

"(The sale of Woori Bank) is a political matter," said the professor. "Politicians have to guarantee first that financial officials should not be held responsible for the privatization of Woori Bank in the future after the presidential election (in 2017)." (Yonhap)