The South Korean government will divest the remaining state stake in Woori Financial Group in the second half if “conditions are right,” the Financial Services Commission said Tuesday after holding public fund management committee.
State-owned Korea Deposit Insurance Corp. (KDIC) retains 17.25 percent stake in Woori Financial Group, which it fully nationalized Woori Bank in the wake of the 1997-1998 financial crisis by merging multiple ailing lenders. Its stake in Woori Bank has been converted to shares in Woori Financial after it turned into a holding structure earlier this year.
The government initially planned to start the sale process of KDIC’s stakes in Woori Financial Group in the first half of this year with a goal to dispose all the remaining 17.25 percent stakes in phases by 2022. The plan, however, hit a snag after the local stock market tanked due to the COVID-19 pandemic, which dragged down the stock price of Woori Financial Group to below 10,000 won ($8.27) from earlier 14,000 won.
“We plan to the privatization scheme and will resume sale process upon identifying favorable conditions in the second half,” the FSC said in a statement.
Given past practice, analysts predict KDIC will wait until the price claws back to 12,300 won apiece. Woori Financial Group shares on Tuesday fell 0.33 percent to close at 9,160 won in Seoul.
The KDIC acquired a 100 percent stake in the financial company in March 2001 to help it normalize the business battered from the 1997-1998 Asian financial crisis. It put in a total of 12.8 trillion won in the financial firm and recovered a combined 11.1 trillion won as of the end of February by selling its stakes to multiple investors.
By Lee Ha-yeon
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