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Woori privatization plan due this month

Committee says it expects to outline a strategy soon

July 17,2010
A long-awaited plan to privatize Woori Financial Group, Korea’s second-biggest financial group in terms of assets, will be finalized within the next two weeks, the Public Fund Oversight Committee announced yesterday.

The committee, which operates under the Financial Services Commission, initially intended to unveil a strategy to sell the government’s 57 percent stake in Woori in the first half of the year.

But it postponed the decision because of the fiscal debt crisis in southern Europe.

Members of the committee have reportedly agreed to spin off Kyongnam Bank and Kwangju Bank from Woori before the group is privatized.

However, they apparently have not yet decided whether Woori will be sold as a whole or in pieces or merged with another entity.

“The method of privatization will be left up to the market, and now we are in talks about how to maximize the collection of public funds used to bail out Woori,” said an official at the FSC.

At this point, Hana Financial Group seems to be the front-runner in the race to acquire Woori, as KB Financial has taken itself out of the race.

Euh Yoon-dae - the new chairman of KB Financial Group - recently said he would focus on profitability rather than expanding the size of KB through mergers and acquisitions.

On the other hand, Kim Seung-yu, chairman of Hana Financial Group, expressed his interest in acquiring Woori in June.

One analyst said yesterday that a merger of Woori and Hana makes the most sense, as it wouldn’t encounter the legal problems other options would likely face.


By Limb Jae-un [jbiz91@joongang.co.kr]



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