South Korea's top regulator said Sunday it would receive preliminary bids for a 6 trillion won ($5.28 billion) controlling stake in Woori Finance Holdings by July 27, after two previous attempts to privatise the group floundered over a lack of bidding interest. Authorities are under pressure to dispose of the stake before the current president, Lee Myung-bak, ends his term in office early next year.
They face an uphill struggle with few domestic firms boasting the capacity for the deal and US fund Lone Star's years-long struggle to offload a stake in Korea Exchange Bank still fresh in foreign investors' minds. "We plan to pick a preferred bidder around early October," Kim Yong-beom, a senior official at the Financial Services Commission (FSC), told reporters.
A sale notice for the stake will be put up on April 30.
Kim told a briefing that it was open to every option, including a merger with a local financial holding company. The government, which owns 57 percent of Woori, has done little to change the sale framework, but there are more favourable circumstances for investors following a revised law that allows bidders to buy new shares of a merged company, the FSC said. It's unclear which potential bidders may emerge. KB Financial Group Inc, seen by some analysts as the most likely local suitor, has said it lacks the financial capacity for the acquisition. Kim Seok-dong, chairman of FSC, said earlier that the government had to fulfil the privatisation project before presidential elections in December.
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