Woori Investment to Be Listed During May or June

Woori Financial Holdings Co., which has Hanvit, Kyongnam Bank and Woori Investment Bank as subsidiary companies, will be listed at the Stock Exchange as early as the end of May.

The government is to proceed with the privatization of the banks, which received public funds, over 6 months earlier than scheduled. 15 percent of Chohung Bank’s stakes (worth approximately 500 million won) will be sold to foreign investors in global depository receipts (DR) within the first half of the year, and Seoul Bank will either be merged or sold in the first half as well.

The Ministry of Finance and Economy (MFE) called for a financial policy coordination meeting on the 25th, and announced that it will promote privatization plan of banks within 3 to 4 years to sell most of its stakes and complete the privatization process.

MFE financial policy director Byun Yang-Ho said, "10 percent of Woori Investment stakes will be sold to the general public from the end of May to June, and immediately will be listed in the Stock Exchange. Also, 15 percent of Chohung stakes will be sold to interested foreign investors in DR from January 30 to February 7." Director Byun explained, "In the case of Seoul Bank, we are promoting both 50 percent sales of the stakes to interested corporations and merger with top-ranking bank or public-funded bank, and it will be concluded within the first half of the year."

Also, 10 to 20 percent of Woori Investment and Chohung Bank stakes will be targeted for sales to domestic or foreign strategic investors. In case of difficulty, they will be sold to domestic institutional investors in forms of `block-sale`. Block-sale is the system in which interested institutional investors buy all of the anticipated amount and re-sell it to other foreign and domestic investors with various options. It has no effect on the stock price.

The government decided to lower its shares to 51 percent until the end of 2003 by selling off 15 percent of Woori Investment stakes in forms of DR.

Governmental shares (49 percent) at Korea First Bank, which handed over its management right to New Bridge Capital, will also be sold in phases after 2003 to complete privatization within 3 to 4 years.

Chan-Sun Hong hcs@donga.com