Bidding for Woori slated for Friday

Financial authorities are scheduled to accept preliminary bids for tax money injected Woori Financial Group this Friday.

The sale plan for the state-controlled financial company is drawing attention in the market while a group of lawmakers are calling on the Financial Services Commission to postpone the M&A competition for the next administration.

Three months ago, the FSC made an official notification of the sale procedure, announcing that it would select preliminary bidders for Woori Financial by July 27.

The project came after financial authorities failed to attract a preferred bidder for Woori Financial several times between 2010 and 2011.

After accepting the bid proposals, the Public Fund Oversight Committee, an arm of the FSC, will select a short list.

Investors on the short list will be entitled to conduct due diligence on Woori Financial. Following the due diligence, the PBOC is scheduled to accept final bids.

A preferred bidder, picked by the committee among the final round of investors, will conduct detailed due diligence on the state-invested financial group.

The negotiations over the auction price and sale terms between the preferred bidder and financial authorities is likely to continue until the fourth quarter of 2012, according to FSC officials.

FSC chairman Kim Seok-dong had said he was optimistic about recouping public funds this year after their injection into Woori in 2001.

“The market situation for the sale is better than that of last year, at least. Woori Financial has also been in a decent position in asset soundness,” he said.

While some analysts argue that attractive sale terms are necessary for the success of the government-led Woori sale project, the FSC chief said the authorities will not seek any revision of enforcement ordinances.

Critics cite bidding prices that may be too high as one of the major hurdles under the current laws.

Aside from opposition from a group of lawmakers, who argue a hasty sale could harm the financial industry, unionized workers from the financial sector are poised to stage a rally against the sale project on July 26.

The financial industry union, which is protesting the scenario of Woori Financial merging with KB Financial Group, is also considering going on strike late this month.

By Kim Yon-se (kys@heraldcorp.com)