Woori Bank, KDIC ink stake sales deal

The Korea Deposit Insurance Corp. (KDIC) has signed contracts with seven entities to sell 29.7 percent of its stake in Woori Bank, as part of its plan to privatize the bank.

The KDIC struck the deals, which will bring the corporation about 2.4 trillion won, at its headquarters in central Seoul.

Mirae Asset Global Investments bought a 3.7 percent stake and IMM Private Equity purchased 6 percent. Tong Yang Life Insurance, Eugene Asset Management, Kiwoom Securities, Korea Investment & Securities and Hanwha Life Insurance each purchased 4 percent.

With the 2.4 trillion won, the government has reclaimed 83.4 percent of public funds worth 12.8 trillion poured into Woori Bank as part of a bailout amid the Asian financial crisis in the late 1990s. Before the deals, the ratio was 64.9 percent.

Following the signings, stakeholders will participate in the management of Woori Bank by recommending outside directors. KDIC will also support a board reshuffle and minimize its influence in the bank, so it can be fully privatized.

“Given the fact that all of the investors here are proven to have expertise in their financial sectors, Woori Bank’s corporate structure will be very balanced in terms of creating synergy,” said KDIC Chairman Gwak Bum-gook.

“The KDIC has suggested corporate governance by a major shareholder as the new model for Woori Bank’s successful privatization. As we have seen in the successful case of Swedbank, I believe this will be a stable corporate structure for the bank.”

Swedbank, one of Sweden’s largest, is run by its 10 largest shareholders.

The government had four botched attempts to sell its stake in the bank. This time, the government decided to sell 30 percent of the 51 percent the government has by splitting it into 4 percent to 8 percent lots in a competitive auction.

The minimum bidding volume was 4 percent, including the percentage of shares bought previously.

After the bidding, eight investors were shortlisted and seven won the right to purchase a stake.

Gwak said the KDIC will push forward with the sale of its remaining stake in Woori Bank.

Courtesy of KDIC Korea Deposit Insurance Corp. (KDIC) Chairman Gwak Bum-gook, fifth from left, shakes hands with the heads of seven major shareholders of Woori Bank after they signed contracts to buy part of the KDIC’s stake in the bank at the corporation’s headquarters in Jung-gu, Seoul, Thursday. From left are Mirae Asset Global Investment President Choi Gyeong-joo, Hanwha Life Insurance Executive Director Kwon Hee-Back, Kiwoom Securities CEO Kwon Yong-won, IMM Private Equity CEO Song In-jun, Gwak, Korea Investment & Securities CEO Yoo Sang-ho, Tong Yang Life Insurance CEO Koo Han-suh and Eugene Asset Management CEO Cho Cheol-hee.