South Korea’s financial regulator won’t consider any bid by state-run KDB Financial Group Inc. for a stake in Woori Finance Holdings Co., the country’s biggest financial company by assets.
The Financial Services Commission cited a lack of public support for KDB bidding on the government’s 57 percent Woori Finance stake, the watchdog said in a report to parliament today. KDB Financial Chairman Kang Man Soo said he will comply with the government position.
“We’ve come to a decision that it isn’t desirable for KDB Financial to participate in the bidding,” FSC Chairman Kim Seok Dong said at a National Assembly session in Seoul, where Kang was also attending. “We still believe getting Woori Finance privatized is a very important task that would help the financial industry leap forward.”
The government last month revived the stake sale after suspending an attempt to privatize the company in December amid a lack of buyer interest. Final bids will now be considered in September as part of President Lee Myung Bak’s push to ease control over financial companies and sell assets to help boost global competitiveness.
Woori Finance shares rose 1.1 percent to 13,300 won as of 2:03 p.m. in Seoul trading, valuing the government stake at about 6.2 trillion won ($5.7 billion). The benchmark Kospi index gained 1.6 percent.
Revised Sale Attempt
Under the revised Woori plan, announced on May 17, the government plans to accept letters of intent by June 29 for a minimum 30 percent stake in Woori Finance. The government is also trying to privatize Seoul-based KDB Financial and aims to sell an unspecified number of shares by May 2014.
Woori Finance was created in 2001 as a holding company for banks that the government rescued following the Asian financial crisis in 1997 and 1998. The government spent 12.8 trillion won to aid Woori Finance and has recouped 5.3 trillion won so far through block sales of shares.
South Korea will “guarantee equal opportunities for all investors at home and abroad” in bidding for Woori Finance, Kim said today. The government holds the Woori stake through the state-run Korea Deposit Insurance Corp.
To contact the reporter on this story: Bomi Lim in Seoul at firstname.lastname@example.org