Woori Financial Group Nears Full Privatization... New Shareholders to Be Announced on the 22nd

9 Investors Participate...7 Investors Submit Bids Above Expected Price

[Asia Economy Reporter Jin-ho Kim] Woori Financial Group is on the verge of 'complete privatization' after 23 years since the injection of public funds. This is because the sale process of the remaining shares (10%) held by the Korea Deposit Insurance Corporation (KDIC) has been a 'success.' A total of nine investors, including large corporations, construction companies, and cryptocurrency exchanges, have participated, and the new shareholders will be revealed tomorrow.

According to the financial sector on the 21st, the Public Fund Management Committee (PFMC) under the Financial Services Commission will announce the results of the 'Woori Financial Group remaining shares sale main bidding' on the afternoon of the 22nd.

According to the PFMC, nine investors participated in the main bidding for the sale of Woori Financial Group's remaining shares. Market sources report that Hoban Construction, Harim, Korea Investment Financial Group, Dunamu, Eugene PE, Woori Employee Stock Ownership Association, and ST International submitted bid proposals.

Among them, a total of seven investors submitted bids exceeding the pre-approved expected price set by the PFMC. The bid proposals amounted to 1.73 times the maximum sale volume (10%). This effectively means that the acquisition competition was a success.

A PFMC official explained, "The successful bidder will be decided by partially reflecting non-price factors in addition to price factors," adding, "The proportion of non-price factors will be evaluated according to objective standards and procedures set by the PFMC." When recovering public funds, the decision will be made considering the three major principles of privatization under the Financial Holding Companies Act: ▲maximizing public fund recovery ▲rapid privatization ▲desirable development direction of the domestic financial industry.

The sale of Woori Financial Group's remaining shares is a follow-up measure by the PFMC under the Financial Services Commission, according to the 'Woori Financial Remaining Shares Sale Roadmap' announced in 2019. The sale is conducted through a competitive bidding process, selling 10% out of the 15.13% shares held by KDIC, with a minimum bid volume of 1%.

The market expects at least three new shareholders to participate. The shares are expected to be divided among three to four investors, for example, 4%, 4%, and 2%, or 4%, 4%, 1%, and 1%. This is because, under current law, non-financial major shareholders can only hold up to 4% of financial company shares. Exceeding 4% requires passing a stringent major shareholder suitability review by financial authorities.

The market analyzes that the high interest from many companies in the sale of Woori Financial's remaining shares is due to the incentive of the 'outside director nomination rights' provided. Investors acquiring more than 4% of shares newly are granted the right to nominate outside directors at Woori Financial. A financial sector official said, "In the case of Woori Financial, the number of outside directors is smaller compared to other financial holding companies, so the merit is considerable," adding, "Since it is an opportunity to own a commercial bank through equity investment, many companies have participated."

It is also analyzed that the future growth potential of the financial industry, which was hit hard by COVID-19, and the fact that Woori Financial recorded its best-ever performance this year and is expected to continuously increase dividends, acted as attractions for investors.

Meanwhile, besides KDIC, Woori Financial Group currently has shares held by the National Pension Service at 9.8%, the Woori Employee Stock Ownership Association at 8.75%, and IMM PE at 5.62%. Once the remaining shares sale process is completed, KDIC will lose its status as the largest shareholder, and Woori Financial will embark on the path of complete privatization after 23 years.

This content was produced with the assistance of AI translation services.