Korea to divest its 57% stake in Woori

But Woori's $10.56bln market cap and complex domestic laws seen as challenges to potential buyers.

The South Korean government on Monday said it will launch the sale of its 57% stake in Woori Finance Holdings Co. on Friday or Saturday, a key stage in a landmark deal that may lead to a major shift in the domestic financial-sector landscape.

Financial Services Commission spokesman Ernst Lee said the Public Fund Oversight Committee will meet Friday to decide on the final plan for the Woori divestment after which it will make a public announcement of the sale. The precise time of any announcement will depend on when the committee, which oversees the administration and recovery of public funds, meets.

A successful sale of the stake, valued at about $6.02 billion based on market value of Woori shares in early trade, would mark the privatization of the last major lender that received bailout money from the government in the wake of the 1997-1998 Asian financial crisis. Seoul continues to unwind its private-sector holdings after investing hundreds of billions of dollars to prevent an economic collapse.

The government plans to sell all or most of its stake in Woori, the country's largest financial holding company by assets, and it aims to select a preferred bidder for the stake by end-March 2011.

View the full story in the Wall Street Journal.