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Block deal

Korea state agency sells $134 mn Woori Fin shares

Apr 09, 2021 (Gmt+09:00)

Korea state agency sells 4 mn Woori Fin shares

The Korea Deposit Insurance Corp. (KDIC) has reduced its stake in Woori Financial Group to 15.25% by selling 149.2 billion won ($134 million) worth of shares in a Friday block trade.

The stake, sold before the market open, amounted to a 2% stake in the country's leading banking group. It was offered at a 2.5% discount to Thursday's closing price of 10,600 won, according to investment banking sources.

KDIC placed a smaller-than-expected stake on the block to get a better pricing amid concerns a large-scale block deal could not be digested in the market, the sources added.

It was the state agency's first block sale of Woori shares following its announcement in mid-2019 that it would dispose of its then remaining 17.25% stake in Woori in two to three batches by 2022.

The sale plan had been delayed because Woori's share price has stayed below the 12,000 won, the average price at which KDIC had injected 12.8 trillion won in taxpayers' money into the entity. Woori was created after combining five troubled financial services companies in the wake of the 1997-98 Asian financial crisis.

Including Friday's block sale, KDIC has retrieved slightly over 11 trillion won of the public money injected into Woori.

Friday's block trade came after Woori shares climbed to a 52-week high of 10,850 won in Apr. 7 intraday trade. JPMorgan, Samsung Securities Co and Mirae Asset Daewoo hanalded the share sale.

After several failed attempts to sell the banking group as a whole in the 2010s, KDIC has cut its stake in Woori through block sales. In 2016, it offloaded a 29.7% stake to a group of seven non-banking Korean financial services firms, including IMM Private Equity, and then sold an additional 2.94% stake to them in the following year.

By Chae-Yeon Kim

why@hankyung.com

Yeonhee Kim edited this article.

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