Woori sale falls through on lack of bidders

The sale of state-run Woori Finance Holdings Co. virtually fell through again on Wednesday as only one investor submitted a preliminary bid for a minimum 30 percent stake in the country's top banking group by assets. MBK Partners Ltd., a homegrown private equity fund, bid to buy Woori Finance, according to an e-mailed statement by Korea Deposit Insurance Corp. Two other private equity funds, TStone Corp. and Vogo Investment, which had also submitted letters of intent, did not take part in the preliminary bidding that closed at 5 p.m. The government had said the Woori sale would be valid only if two or more prospective buyers submitted bids. Market watchers, meanwhile, said that the government may be reluctant to proceed with the sale since the recent sharp fall in Woori share prices do not abide by the government's goal of maximizing public fund redemption. Shares of the top banking group dropped around 27 percent over eight straight sessions between Aug. 2-11, reflecting investor concerns on the first-ever U.S. credit rating cut and the eurozone's debt crisis. South Korea has been seeking to sell its 56.97 percent stake in Woori Finance, which the government rescued with taxpayer money in the aftermath of the 1997-98 Asian financial crisis. Efforts to privatize the top banking group, however, have fallen through due to lukewarm interest from investors. Woori Finance is one of the many financial institutions the government salvaged by injecting massive amounts of public funds when the financial crisis erupted in 1997. As of late June, the country had retrieved 101.5 trillion won (US$9.5 billion), or 60.2 percent, out of a total of the 168.6 trillion won worth of public funds used as bailout money.