ID :
201892
Wed, 08/17/2011 - 13:25
Auther :
Shortlink :
https://oananews.org//node/201892
The shortlink copeid
Woori sale falls through on lack of bidders
(ATTN: ADDS details in paras 5-11, final para; CORRECTS exchange rate in penultimate para)
SEOUL, Aug. 17 (Yonhap) -- The sale of state-run Woori Finance Holdings Co. virtually fell through again on Wednesday as only one investor submitted a preliminary bid for a minimum 30 percent stake in the country's top banking group by assets.
MBK Partners Ltd., a homegrown private equity fund, was the sole bidder to buy Woori Finance, according to an e-mailed statement by Korea Deposit Insurance Corp, a state deposit insurer which handles the sale.
Two other private equity funds, TStone Corp. and Vogo Investment, which had also submitted letters of intent, did not take part in the preliminary bidding that closed at 5 p.m, it said.
The government had said the Woori sale would be valid only if two or more prospective buyers submitted bids.
The Financial Services Commission (FSC), the country's financial watchdog, said it will hold a meeting Friday to determine whether to proceed with a final bidding.
MBK Partners has created a consortium with local lender Korean Federation of Community Credit Cooperatives and is also known to have teamed up with Goldman Sachs Group Inc. and regional lender BS Financial Group Inc.
"MBK Partners prepared for the bid in an earnest and flawless manner. We hope to contribute to the development of the local financial market," a company spokesman quoted its head Yoon Jong-ha as saying.
Vogo Investment said in an e-mailed statement that it had decided not to take part due to a change in its financial investors and low chances of an acquisition.
TStone Corp. said it decided not to submit a bid due to controversy over the Woori Finance sale and the recent sharp fall in Woori Finance's share prices, but added it plans on closely following the situation at the top banking group.
The Wednesday result marks the latest setback in the government's attempt to privatize Woori Finance. In June, the FSC scrapped its plan to sell Woori Finance to KDB Financial Group Inc. due to strong public criticism.
The FSC also failed to ease a law that requires financial services groups to purchase at least a 95 percent stake in a state-run holding firm. Due to the law, no banking group had submitted letters of intent for the Woori Finance deal.
Market watchers, meanwhile, said that the government may be reluctant to proceed with the sale since the recent sharp fall in Woori share prices do not abide by the government's goal of maximizing public fund redemption.
Shares of Woori Finance dropped around 27 percent over eight straight sessions between Aug. 2-11, reflecting investor concerns on the first-ever U.S. credit rating cut and the eurozone's debt crisis.
South Korea has been seeking to sell its 56.97 percent stake in Woori Finance, which the government rescued with taxpayer money in the aftermath of the 1997-98 Asian financial crisis. Efforts to privatize the top banking group, however, have fallen through due to lukewarm interest from investors.
Woori Finance is one of the many financial institutions the government salvaged by injecting massive amounts of public funds when the financial crisis erupted in 1997.
As of late June, the country had retrieved 101.5 trillion won (US$94.7 billion), or 60.2 percent, out of a total of the 168.6 trillion won worth of public funds used as bailout money.
The sale of Woori Finance is one of the top priorities pushed by the government of President Lee Myung-bak as part of its broader plans to privatize financial institutions, including state-run Korea Development Bank, to raise competitiveness in the financial sector.
SEOUL, Aug. 17 (Yonhap) -- The sale of state-run Woori Finance Holdings Co. virtually fell through again on Wednesday as only one investor submitted a preliminary bid for a minimum 30 percent stake in the country's top banking group by assets.
MBK Partners Ltd., a homegrown private equity fund, was the sole bidder to buy Woori Finance, according to an e-mailed statement by Korea Deposit Insurance Corp, a state deposit insurer which handles the sale.
Two other private equity funds, TStone Corp. and Vogo Investment, which had also submitted letters of intent, did not take part in the preliminary bidding that closed at 5 p.m, it said.
The government had said the Woori sale would be valid only if two or more prospective buyers submitted bids.
The Financial Services Commission (FSC), the country's financial watchdog, said it will hold a meeting Friday to determine whether to proceed with a final bidding.
MBK Partners has created a consortium with local lender Korean Federation of Community Credit Cooperatives and is also known to have teamed up with Goldman Sachs Group Inc. and regional lender BS Financial Group Inc.
"MBK Partners prepared for the bid in an earnest and flawless manner. We hope to contribute to the development of the local financial market," a company spokesman quoted its head Yoon Jong-ha as saying.
Vogo Investment said in an e-mailed statement that it had decided not to take part due to a change in its financial investors and low chances of an acquisition.
TStone Corp. said it decided not to submit a bid due to controversy over the Woori Finance sale and the recent sharp fall in Woori Finance's share prices, but added it plans on closely following the situation at the top banking group.
The Wednesday result marks the latest setback in the government's attempt to privatize Woori Finance. In June, the FSC scrapped its plan to sell Woori Finance to KDB Financial Group Inc. due to strong public criticism.
The FSC also failed to ease a law that requires financial services groups to purchase at least a 95 percent stake in a state-run holding firm. Due to the law, no banking group had submitted letters of intent for the Woori Finance deal.
Market watchers, meanwhile, said that the government may be reluctant to proceed with the sale since the recent sharp fall in Woori share prices do not abide by the government's goal of maximizing public fund redemption.
Shares of Woori Finance dropped around 27 percent over eight straight sessions between Aug. 2-11, reflecting investor concerns on the first-ever U.S. credit rating cut and the eurozone's debt crisis.
South Korea has been seeking to sell its 56.97 percent stake in Woori Finance, which the government rescued with taxpayer money in the aftermath of the 1997-98 Asian financial crisis. Efforts to privatize the top banking group, however, have fallen through due to lukewarm interest from investors.
Woori Finance is one of the many financial institutions the government salvaged by injecting massive amounts of public funds when the financial crisis erupted in 1997.
As of late June, the country had retrieved 101.5 trillion won (US$94.7 billion), or 60.2 percent, out of a total of the 168.6 trillion won worth of public funds used as bailout money.
The sale of Woori Finance is one of the top priorities pushed by the government of President Lee Myung-bak as part of its broader plans to privatize financial institutions, including state-run Korea Development Bank, to raise competitiveness in the financial sector.
