SEOUL Aug 16 South Korean financial behemoth
Woori Finance put up for sale a controlling stake in
its brokerage unit Woori Investment & Securities Co Ltd
on Friday, in a deal that analysts say may top 1.2
trillion won ($1.07 billion).
The sale of the brokerage unit, and three other affiliates -
an asset manager, a savings bank and a life insurance joint
venture with Aviva Plc - is part of the government's plan
to recoup some of the money it spent on bailing out the
country's biggest financial holding company.
The government is trying to get back about half of the 12.8
trillion won in taxpayers' money it injected into Woori Finance
since the Asian financial crisis in the late 1990s. The
government's three previous attempts to offload its stake in the
group had failed because of a lack of bidders.
South Korea's Financial Services Commission, the country's
top financial regulator, has vowed to return Woori Finance to
the market quickly.
Bidding interest has been lacklustre largely because few
domestic firms have the financial muscle to take on the entire
government stake, while U.S. fund Lone Star's years-long battle
to offload a stake in Korea Exchange Bank remains fresh in
foreign investors' minds.
Among Woori Finance's assets is Woori Bank,
which accounts for the bulk of the group's earnings. The
government plans to hold a sale of the bank by the end of next
Woori Finance's brokerage unit is expected to garner more
attention than Woori Bank, which is seen attracting fewer
prospective bidders, if at all.
"The size of Woori Bank, and the government's intention not
to sell it to a foreign buyer, means a complete sell-down of the
state's stake will remain very challenging," Fitch said in June.
Woori Investment & Securities is the largest South Korean
brokerage by assets as of end-March. Preliminary bids are due on
Woori Finance holds a 37.9 percent share in the brokerage,
with the stake worth 886.3 billion won on the market as of
Local financial holdings companies KB Financial Group Inc
and unlisted Nonghyup Financial Group Inc have
already flagged their interest in the brokerage.
"Woori Investment & Securities' capabilities in investment
banking and research will be helpful in terms of portfolio
diversification (from) our traditional strengths in retail
banking," Nonghyup Financial's Chairman Yim Jong-yong told
Reuters last week.