Posted June. 26, 2013 05:39,
To privatize Woori Financial Holdings that more than 12 trillion won (10.4 U.S. billion dollars) in public funds has been injected, the government will start promoting sales of Woori Investment Securities, No. 2 securities firm in Korea, together with four Woori subsidiaries including WooriAviva Life Insurance and Woori Financial Savings Bank. Financial institutions are already preparing for acquisition plans, which will trigger a big bang of Korea`s financial industry.
According to financial sources Tuesday, the Public Fund Oversight Committee will sell Woori Investment Securities, which is attracting the biggest number of companies for takeover at a recent survey, with WooriAviva Life Insurance, Woori Financial Savings Bank, Woori Asset Management and Woori Financial, all of which are relatively difficult to find buyers.
KB Financial Group, Hana Financial Group, Nonghyup Financial Group and Shinhan Financial Group are showing interest in the acquisition of this group. The securities firms under these financial holding companies rank below fifth in securities industry in terms of equity capital, but once the deal is made, they can leap to first and second ranks.
The committee will also pursue sales of regional banks of Kyongnam Bank and Gwangju Bank. These banks will be sold to financial institutions that offer the highest price, but the committee will negotiate with the acquirer to guarantee independent management of the two banks so as to reflect regional sentiment.
On the sales of regional banks, Financial Services Commission Chairman Shin Je-yoon said earlier this month, "We will abide by the principle of selling to the party presenting the highest price." But he later said the government will consider regional features of high political interests. Busan Bank and Daegu Bank are eying for Kyongnam Bank, while JB Bank and the Industrial and Commercial Bank of China are interested in Gwangju Bank.
The committee will sell Woori Bank together with other subsidiaries including Woori Card, Woori Financial Research Institute, Woori Private Equity, Woori F&I and Woori FIS in the first half of next year. It will sell the group to companies exclusively in financial business such as Kyobo Life Insurance, or to certain shareholders including pension funds in equal share. Kyobo Life Insurance is in talks with overseas investors by creating a team to acquire Woori Bank. KB Financial Group, Shinhan Financial Group, Hana Financial Group and Nonghyup Financial Group are also potential acquirer candidates. Large companies that mainly focus on manufacturing were excluded from candidates according to the Banking act and the Financial Holding Company Act, which limits industrial capital`s acquisition of stake in banks.
The financial authorities will finalize the sales of Woori Financial Group subsidiaries by the end of next year. A high-ranking government official said, "It had been hard to find an acquirer for Woori Financial Group because collective sales would reach more than 5 trillion won (4.3 billion dollars). But splitting them up by subsidiary will give more companies chances for acquisition. We expect to complete privatization at a planned deadline."