The Korea Deposit Insurance Corporation will no longer be the largest shareholder in the Woori financial group

Posted on 11/25/2021

On September 9, 2021, the Financial Services Commission (FSC) of South Korea announced its intention 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 aimed to completely privatize Woori Financial Group. The Korean government has sold KDIC’s stake in WFG through a series of bulk sales and competitive auctions over the years. The sales allowed the government to recover around 89.6% of public funds and gave WFG management autonomy since its memorandum of understanding with KDIC was withdrawn in 2016. The sale of 29.7% of the stake of the KDIC in December 2016 further accelerated the process of privatizing WFG. However, as KDIC still retained the status of the largest shareholder, the Public Funds Oversight Committee announced the roadmap for the sale of the remaining stake in WFG in June 2019.

In November 2021, FSC announced the results of a competitive 9.3% auction of Woori Financial Group shares held by the Korea Deposit Insurance Corporation on November 22. 000 per share, which is higher than the share price (10,800 KRW) at the time the auction plan was unveiled on September 9th.

The five successful bidders are Eugene Private Equity (4%), KTB Asset Management (2.3%), Align Partners Consortium (1%), Dunamu (1%) and the employee shareholding association of Woori Financial Group (1 %) with Eugene Private Equity gaining the right to appoint an external member of the board of directors.

With the success of the auction, KDIC will no longer be WFG’s main shareholder and the government’s goal of privatizing WFG was achieved in this auction round some 23 years after the injection of public funds for the bailout in 1998. The right to appoint a non-permanent board member will expire at the end of the current incumbent’s term in March 2022. It is expected that KDIC will complete the share transfer process by December 9. The Public Funds Supervisory Board will endeavor to promptly complete the sale of the remaining KDIC shares in WFG at an appropriate time in the future.

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