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Eugene PE, 4 others chosen to buy 9.3 pct stake in Woori Financial

Finance 15:59 November 22, 2021

SEOUL, Nov. 22 (Yonhap) -- Eugene PE, the private equity firm of South Korea's Eugene Group, and four others have been chosen to buy a combined 9.3 percent government-held stake in Woori Financial Holdings Co. for 897.7 billion won (US$754.1 million), South Korea's financial regulator said Monday.

The move will put an end to South Korea's efforts to privatize Woori Financial Holdings, which received 12.8 trillion won worth of public funds from the government in the aftermath of the 1997-98 Asian financial crisis.

The state-run Korea Depository Insurance Corp. (KDIC) is the largest shareholder of Woori Financial with a 15.13 percent share, though the state deposit insurer sold a 28 percent stake to institutional investors in 2016 and an additional 2 percent for 149.3 billion won in April this year.

Eugene PE, 4 others chosen to buy 9.3 pct stake in Woori Financial - 1

The government has been seeking to sell a 10 percent stake in Woori Financial since September as part of recouping public funds.

The Financial Services Commission said the five companies -- Eugene PE, KTB Asset Management Co., Align Partners consortium, Woori Financial's employee stock ownership association and fintech firm Dunamu -- will take over a 9.3 percent stake from the KDIC.

"The sale will help recoup about 897.7 billion won in public funds," the FSC said in a press release. "When the sale is completed, 12.3 trillion won, or 96.6 percent of the 12.8 trillion won injected into Woori Financial Holdings, will be recovered."

Eugene PE will acquire a 4 percent stake, making it entitled to name an outsider director for the board of Woori Financial as stipulated by the terms of the sale.

The others will buy 1-2.3 percent stakes in Woori Financial. Through the transaction, Woori Financial's employee stock ownership association will become the largest shareholder, the FSC said.

The regulator said the sale will effectively privatize Woori Financial and remove the "discount factor" associated with government ownership. It also hoped for an "upside gain" in the sale of its remaining 5.83 percent stake going forward.

All related procedures for the stake sale will be completed by Dec. 9, the FSC said, adding the remaining stake will also be sold "swiftly" in consideration of market conditions.

The stake sale is in line with a government road map to dispose of its interest in the major financial holding company by 2022, whose flagship is Woori Bank.

It said that the sale was made at the low and mid range of 13,000 won per share on average.

Shares in Woori Financial rose 1.91 percent to 13,350 won Monday, outperforming the broader KOSPI's 1.42 percent gain.


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