By Koh Byung-joon
SEJONG, July 18 (Yonhap) -- South Korea sold 364.2 billion won (US$353.8 million) worth of its stakes in the Industrial Bank of Korea (IBK) on Friday, the finance ministry said.
The deal came after a sale plan, which was supposed to be concluded on Thursday, fell apart, raising worries that the government's plan to offload its shares in the IBK might be delayed.
According to the ministry, the government sold a total of 28.02 million shares in the IBK for 13,000 won apiece. They were sold through a block deal in after-hours trading on Friday.
The amount represents 5 percent of the government's stake in the bank. The sale brought down the government's stake to 55 percent.
The government was supposed to sell part of its shares in the IBK on Thursday but said that the deal fell apart on unspecified reasons.
A finance ministry official told Yonhap that it was natural for a deal to fail when conditions are not met. The official did not elaborate on the reason but said that negotiations were still ongoing to arrange the sale.
Market sources speculated that a legal issue may have been to blame, saying allegations that the IBK had violated sanctions against Iran prompted a U.S. bank to withdraw from the sale. The ministry denied the speculation.
In May, it was reported that the IBK was reprimanded for illegal money transactions involving an account held by the Iranian central bank.
The lead managers for the block deal were JP Morgan, Merrill Lynch, Samsung Securities, and Korea Investment and Securities.
"A legal issue lingering over the IBK's violation of the sanctions might cause U.S. firms among the lead managers to be reluctant to join the sale," a source told Yonhap on condition of anonymity.
"One of the U.S. banks gave a 'pending' outlook on the deal to the finance ministry yesterday, which later had to decide to cancel its planned stake sale," he added.
He said that the legal issue might have been resolved during extended negotiations with the government that went on until later in the afternoon.
The government plans to sell a total of 586.2 billion won worth of its shares in the policy bank this year as part of efforts to raise money to meet its growing fiscal needs.
Shares of IBK closed at 13,150 won, down 3.66 percent from a day earlier, compared to a 0.07 percent fall in the overall benchmark KOSPI.
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