Three Funds Bidding on South Korea’s Woori Stake

South Korea says that three local private equity firms are interested in the government’s $6 billion stake in Woori Finance Holdings. Vogo Fund and TStone confirmed that they were bidding for the stake, Reuters reported. MBK Partners was reported to be the third bidder, Reuters wrote.

(Reuters) – South Korea said it received interest from three local private equity funds for the government’s $6 billion stake in Woori Finance Holdings, raising hopes the troubled auction may go through.

Private equity funds Vogo Fund and TStone confirmed they were bidding for the stake, while a source with direct knowledge of the deal said the other bidder was MBK Partners.

MBK Partners was not immediately available for comment.

TStone is one of the few private equity funds eligible to be an owner of a local financial holding company, Chairman Min Euoo-sung said.

“We will try hard to raise fund,” said Min, former chairman of state-run KDB Financial Group and former vice chairman of Woori Finance.

Privatisation of Woori became uncertain after regulators earlier this month barred KDB Financial Group, the sole investor to publicly express its interest, from participating in the bidding.

The decision raised the odds of another delay to the sale of Woori after a previous failure in December due to a lack of bid interest.

Since the December failure, the regulators attempted to ease financial holding company regulations to attract bid interest from the likes of KB Financial Group and Hana Financial Group , but the move was blocked by oppositions from politicians.

The three bidders submitted their letters of interest for at least 30 percent of Woori as the government closed the first round of bidding on Wednesday for its 57 percent stake worth around $6 billion, Korea Deposit Insurance Corp, which oversees the sales process, said in a statement.

Privatisation is a major plank of South Korean President Lee Myung-bak’s election pledge, but analysts doubt a success in Woori privatisation in the absence of interest from domestic financial holding companies and foreign investors.

Prior to the announcement, shares in Woori, South Korea’s biggest bank holding company by asset, closed up 0.7 percent, compared with a 1.5 percent rise in the wider market . (Reporting by Ju-min Park; Editing by Vinu Pilakkott)