Logo of Phnom Penh Post newspaper Phnom Penh Post - Woori ruled out of Prasac bid

Woori ruled out of Prasac bid

A customer uses a Prasac Microfinance Institution ATM at a Kampong Speu branch in 2014.
A customer uses a Prasac Microfinance Institution ATM at a Kampong Speu branch in 2014. Hong Menea

Woori ruled out of Prasac bid

South Korean financial giant Woori Bank, widely seen as the preferred bidder for a 50 per cent stake in Cambodian microlender Prasac, is out of the running as it was not presented to the central bank as an official bidder, local banking officials have said.

Chea Serey, director-general of the National Bank of Cambodia (NBC), said Prasac never presented the South Korean commercial bank for approval, a move that nullified its proposal to acquire half of the micro-lender shareholding.

“As a procedure, Prasac should present to the NBC the [list of] potential investors for approval,” she said, adding that this operation must be done before negotiations can officially begin. “In this case, Woori was never mentioned in the proposed list of candidates.”

Serey said Prasac, Cambodia’s largest microfinance institution (MFI) by assets, required “big and strong institutional and capital support” to ensure the sustainability of its growth.

Prasac had over $1 billion in assets as of end-2015 and earned $46 million net profit last year, according to its audited 2015 financial statement. The MFI has over 180 branches, with about 321,000 borrowers and 450,000 depositors.

Serey said the NBC would consider approving a financial institution in the existing pool of three pre-approved investors, which include strongly regulated players. However, she did not name the investors.

In June, South Korean media reported that Woori Bank, the country’s largest bank in terms of consolidated assets, had beaten out a consortium of Korean financial institutions and was waiting for the NBC’s seal of approval to purchase the 50 per cent stake.

A local financial industry source said that all of the remaining bidders hail from overseas, including Sri Lanka’s Lanka ORIX Leasing Company (LOLC) – which already holds a 22 per cent stake in the MFI – and Hong Kong’s Bank of East Asia, with the potential of a combined bid through a partnered financial agreement.

“A major reason for the sale is for Prasac to become a commercial bank,” the source said. “The NBC has consistently said they can only do that if a large commercial bank comes in as a major shareholder.”

Sim Senacheert, chief executive of Prasac, declined to comment on the failed Woori bid and said that all negotiations must remain confidential until officially approved.

Bun Mony, CEO of Sathapana Bank Plc, said while Prasac already easily meets the minimum requirements to graduate into a commercial bank, with over $100 million in registered capital, the deposit-taking MFI was seeking a partner that could smooth over the operational changes.

“Prasac has the right strategy in looking for a large bank to acquire a stake in the company, and I think that is what the central bank prefers,” he said.

Additional Reporting by Kali Kotoski

MOST VIEWED

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Preah Vihear court drops charges against villagers

    The Preah Vihear Provincial Court has dropped all charges against eight ethnic Kuoy villagers who were in a land dispute with the Hengfu Group Sugar Industry Co Ltd since 2014. Wednesday’s decision was made by the judge who tried the case on June 10. The eight

  • Gov’t to boost Siem Reap tourism

    The Ministry of Tourism released the results of an inter-ministerial committee meeting concerning Siem Reap province’s Tourism Development Master Plan for 2020-2035 on Wednesday, revealing the government’s plan to improve the overall tourist landscape there. The meeting was attended by Minister of Tourism

  • Residents ordered to remove structures on Phnom Penh’s canal

    Phnom Penh municipal governor Khuong Sreng has ordered authorities to act against the perpetrators who built houses along the Luo 5 canal in Meanchey district. The municipal administration plans to create a committee to solve the matter. The order was given on Wednesday while Sreng led

  • ‘On the offensive’: Cambodia to load up on loans to stimulate economy

    As the dust settles on the economy, Cambodia comes to grips with what needs to be done to turn the economy around, starting with a big shopping list for credit ‘We are going on the offensive,” Vongsey Vissoth, Ministry of Economy and Finance permanent secretary

  • Government set to make up for cancelled April holiday

    The government is set to make up for a five-day Khmer New Year holiday late this month or early next month. The holiday was earlier cancelled due to the onset of Covid-19. The announcement is expected on Friday as the government is studying a range

  • Families told to register for cash handouts

    The government has called on poor families to apply to commune authorities for evaluation to receive financial support during the Covid-19 crisis. A $300 million budget has been planned for implementation within a year. Ministry of Economy and Finance secretary of state Vongsey Visoth said this

  • Crumbling prices, rent ruffle condo segment

    The prolonged decline in international arrivals to Cambodia intensified by renewed Covid-19 fears has driven down condominium sales prices and rental rates in Phnom Penh, a research report said. CBRE Cambodia, the local affiliate of US commercial real estate services and investment firm CBRE Group