The privatization of state-controlled Woori Bank originally scheduled for this year appears to have hit more roadblocks after four failed attempts since 2010.
The government ― which bailed out the bank in the aftermath of the 1997-98 Asian financial crisis ― had planned to sell its dominant stake in the bank this year, but it may be further delayed, according to industry sources.
Further, the Public Fund Oversight Committee in charge of the Woori sale has also hinted at a delay in the auction process.
Yoon Chang-hyun, who took office on Monday as the new chairman of the PFOC, was quoted by an online news provider, as saying that “it is difficult to go ahead with the sale of Woori Bank within the year.”
He reportedly stressed the lack of demand ― the number of potential bidders ― at the current stage, saying that only a sovereign wealth fund in the Middle East has expressed its interest as known earlier.
He also made it clear that the authority “will not hurry as the main issue is to reach good deal, not a fast deal.” He added that it seems the investor from Abu Dhabi, United Arab Emirates, is also taking a cautious stance.
Some market observers predict that the bank sale could be pushed to after the April 13 general elections next year.
Meanwhile, the government has not ruled out the possibility that it may fail to fully recover the taxpayers’ money that was used to bail out the bank.
During the National Assembly’s audit on the Financial Service Commission, which controls the PFOC, its chairman Yim Jong-yong said that “it would not be a breach of trust even if the authority fails to retrieve the principal in full.”
His remarks hint that the sale price would be set at under 13,500 won ($11.70) per share ― the price when the government took over a 51.04 percent stake in the then debt-saddled bank.
Woori Bank’s stock price has ranged between 8,800 won and 9,700 won over the past three months while it peaked at 11,200 won during a trading session in the first half.
The government has injected 12.7 trillion won in public funds into the bank and its affiliates since October 1998.
In July, the FSC and PFOC unveiled a revised plan to sell the government’s dominant stake in Woori Bank to a group of investors, scrapping their earlier stance to find a single bidder.
The number of investors is expected to be set at between three and 10 on the basis of a split-based holding among a group of oligopolistic stakeholders, PFOC officials noted at that time.
By Kim Yon-se (kys@heraldcorp.com)
