Korea Deposit Insurance Corporation to No Longer Be the Largest Shareholder in Woori Financial Group
Posted on 11/25/2021
On September 9, 2021, South Korea’s Financial Services Commission (FSC) disclosed its plan to sell 10% of the remaining stake (15.13%) held by the Korea Deposit Insurance Corporation (KDIC) in Woori Financial Group (WFG) through competitive bidding. The Korean government had a goal of complete privatization Woori Financial Group. The Korean government has been selling KDIC’s stake in WFG through a series of block sales and competitive auctions over the years. The sales allowed the government to recoup about 89.6 percent of public funds and afforded WFG with management autonomy as its MOU with the KDIC has been retracted in 2016. The KDIC’s sale of 29.7 percent stake in December 2016 further accelerated WFG’s privatization process. However, as the KDIC still maintained the largest shareholder status, the Public Fund Oversight Committee announced the roadmap for selling remaining stake in WFG in June 2019.
In November 2021, FSC announced the result of the competitive auction of 9.3 percent of shares in Woori Financial Group held by the Korea Deposit Insurance Corporation on November 22. The Public Fund Oversight Committee has selected five winning bidders with bidding prices from all bidders exceeding KRW13,000 per share which is higher than the share price (KRW10,800) at the time the auction plan was unveiled on September 9.
The five successful bidders are Eugene Private Equity (4%), KTB Asset Management (2.3%), Align Partners Consortium (1%), Dunamu (1%) and Woori Financial Group’s employee stock ownership association (1%) with Eugene Private Equity earning the right to appoint an outside board member.
With successful result of the auction, the KDIC will no longer be the largest shareholder of WFG and the government’s goal of privatization of WFG has been accomplished in this round of auction some 23 years after the injection of public funds for bailout in 1998. The KDIC’s right to appoint a non-standing board member will expire when the current incumbent’s term ends in March 2022. It is expected that the KDIC will complete the share transfer process by December 9. The Public Fund Oversight Committee will work to promptly complete the sale of KDIC’s remaining shares in WFG at an appropriate time in the future.