South Korea’s Woori Finance Draws Multiple Bidders

Eleven bidders have expressed interest in buying part of South Korea’s Woori Finance Holdings, Reuters reports. Woori is not releasing the names of potential investors that would vie for as much as 57% of the financial services firm – a stake worth around $6 billion, Reuters said. Other media reports have said that potential suitors could include The Carlyle Group and Vogo Fund.

(Reuters) – Eleven bidders, including a group led by Woori Finance Holdings, have expressed interest in buying up to 57 percent worth around $6 billion of South Korea’s top financial services firm, the government said on Friday.

The Woori auction drew surprisingly strong interest, allaying market concern that the government may have to delay the sale of its stake again after potential bidder Hana Financial pulled out of the race and instead opted to buy a $4.1 billion stake in Korea Exchange Bank on Thursday.

The Woori stake sale would mark the completion of South Korea’s bank privatisation programme after it injected billions of dollars of taxpayers’ money to bail out financial firms in the wake of the Asian financial crisis in the late 1990s.

Korea poured 12.8 trillion won ($11.2 billion) into Woori to recapitalise it and has recovered less than half of the money so far.

Woori, hoping to stand on its own feet and avoid being merged with a rival, formed a consortium led by its employees, who committed 900 billion won, the group said in a statement.

It had also lined up investors including steelmaker POSCO , telecommunications operator KT Corp and the National Pension Service, a source familiar with the matter said earlier, declining to be identified because of the sensitivity of the issue.

The Korea Deposit Insurance Corp (KDIC), the top shareholder of Woori, declined to reveal names of individual bidders.

PRIVATE EQUITY INTEREST

Media reports said private equity firm Carlyle Group has also submitted interest for the Woori stake, while Industrial and Commercial Bank of China (ICBC) submitted its letter of intent for a regional banking unit of Woori that is also on sale . [ID:nSEU003189]

Carlyle officials were not available for comment and ICBC declined to comment.

Local media reported that local private equity firm Vogo Fund was also interested in Woori. The fund’s head declined to comment.

The auction, which requires bidders to buy at least 4 percent of Woori or merge with it, comes a day after smaller rival Hana agreed to snap up 51 percent of KEB from Lone Star in the country’s biggest ever bank acquisition. [ID:nSGE6AO059]

The government plans to pick a preferred bidder for Woori by March and finalise the deal by June.

KDIC created Woori in April 2001 by merging banks that received public funds in the wake of the Asian financial crisis, and has sold 43 percent of Woori shares in a series of sales beginning in June 2002.

It is also selling two regional banking arms of Woori — Kwangju Bank and Kyungnam Bank — and said on Friday it has received interest from 12 bidders for the regional banks. ($1=1141.6 Won) (Additional reporting by Hyunjoo Jin and Miyoung Kim in SEOUL and Ai Peng Soo in SHANGHAI; Editing by Chris Lewis and Muralikumar Anantharaman)