By Yoon Won-sup and Cho Jeehyun
The South Korean government will pursue sale of a 7 percent out of 18.5 percent remaining stake in Woori Bank next year, according to the government’s budgetary spending plan for 2018.
Under the 2018 budgetary outline under review by the National Assembly, state-owned Korea Deposit Insurance Corp. (KDIC) estimated revenue next year from sale of 47,320,000 shares or 7 percent stake in Woori Bank. The KDIC manages the public fund with which it spends to bail out financial institutions.
The state firm recovered 10.6 trillion won ($9 billion) out of total 12.8 trillion injected to turn the bank around following the 1997-1998 financial crisis. After numerous failed attempts, the government was able to sell 30 percent of its 51 percent remaining stake in splinters to seven investors last year.
After the new shareholders exercised options attached to the shares, the KDIC now retains 18.5 percent stake in the bank.
Further sale this year was not possible as full-fledged government activities came to a standstill after the president was impeached and a snap election took place in May. Woori Bank’s CEO was sacked as the new government under liberal President Moon Jae-in embarked on a crackdown on corrupt practices such as illicit preferential hiring rampant in public institutions.
KDIC is expected to go ahead with the privatization scheme after a new CEO is placed at Woori Bank.
Woori Bank is under oligopolistic ownership. After KDIC, IMM Private Equity owns 6 percent of the bank and Korea Investment & Securities Co., Hanwha Life Insurance Co., Tongyang Life Insurance Co., Kiwoom Securities Co., and Eugene Investment & Securities Co. each 4 percent. Mirae Asset Global Investments Co. has a 3.7 percent interest.
Shares of Woori Bank closed Monday at 15,500 won, down 0.64 percent from the previous session.