South Korea Receives Initial Bids for Woori’s Two Regional Banks

South Korea received a first round of offers to buy Woori Finance Holdings Co. (053000)’s two regional banks as part of the government’s latest attempt to privatize the nation’s biggest financial group.

Seven potential investors submitted preliminary bids for Woori’s Kwangju Bank unit and four made offers for Kyongnam Bank, Korea Deposit Insurance Corp. said in an e-mailed statement today, without naming them. Industrial Bank of Korea (024110) said it was among the bidders for Kyongnam, and Shinhan Financial Group Co. said it made an offer for Kwangju.

South Korea said in June that it will sell Woori’s assets separately after failing to attract buyers for its 57 percent stake three times since 2010. The government has lumped the assets into three groups as it tries to recoup taxpayer money spent more than a decade ago to bail out the weakest banks.

A consortium of private equity funds and businessmen based in Gyeongnam province submitted a preliminary bid for Kyongnam Bank, Yun Jong Soo, a spokesman for Changwon Chamber of Commerce & Industry, which represents the group, said by phone.

A group of businessmen based in Gwangju city and Jeonnam province lodged an offer for Kwangju Bank, the Gwangju Chamber of Commerce & Industry said in an e-mailed statement.

The government is seeking to sell 57 percent of each bank. Its Kyongnam Bank holding may be worth about 1.2 trillion won ($1.1 billion) and its stake in Kwangju Bank may be valued at about 1 trillion won, estimated Hwang Seok Kyu, an analyst at Kyobo Securities Co. (030610) Prices may go up if competition intensifies, Hwang said.

Kyongnam Bank, based in the southeastern industrial city of Changwon, had 31 trillion won of assets as of December, including 1.97 trillion won in equity capital, according to Financial Services Commission data. Kwangju Bank, based in the namesake southwestern city of Gwangju, had 20 trillion won of assets, including 1.34 trillion won in equity capital, the FSC, a government regulator leading the sales of Woori Finance assets, said at the time.

To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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