ID :
60389
Wed, 05/13/2009 - 15:25
Auther :
Shortlink :
https://oananews.org//node/60389
The shortlink copeid
KDB to overhaul large firms via private equity fund
SEOUL, May 13 (Yonhap) -- The Korea Development Bank (KDB) plans to buy corporate
assets through a private equity fund in a bid to accelerate large firms'
restructuring, the bank's chief said Wednesday.
Local banks are in the process of revamping highly leveraged companies, including
large firms, to head off their negative impact on the economy. But risk-averse
banks and companies are under fire for dragging their feet amid budding signs of
an economic recovery.
"To accelerate the corporate revamp drive, KDB plans to purchase assets held by
conglomerates through a private equity fund and later share profits with them,"
Min Euoo-sung, chairman of the state policy lender, told a press conference.
His remarks come as liquidity-squeezed large business groups are expected to sign
agreements with creditor banks calling for enhancing their financial health this
month.
According to KDB, if the asset sales generate profits, the policy lender plans to
share part of the revenue with the business groups in question to help dispel
concerns over the sales at a sharp discount. KDB also will provide them with the
right to buy assets back from the lender so as to allow them to regain management
after market conditions improve.
The move comes amid growing concerns that a possible chain reaction of business
failures would undermine the soundness of the banking sector, dealing a harsh
blow to the economy.
Meanwhile, Min repeated his interest in acquiring a lender in a bid to gain a
retail banking business prior to a planned privatization.
In late April, the National Assembly passed a law on KDB privatization. The
government, which owns 100 percent of the lender, plans to put KDB and its three
affiliates under a holding company in September and will start to reduce the
stake within five years.
"KDB is considering buying a lender in the domestic or Asian markets to secure
the deposits," Min said. He added a possible takeover would come before the
government starts to sell the state-run lender.
Recently, shares of Korea Exchange Bank, controlled by U.S. equity fund Lone Star
Funds, jumped on expectations that KDB is interested in buying the bank.
KDB said it will seek to list shares of an envisioned holding company either on
the Seoul bourse or overseas stock markets, or simultaneously within two to three
years to secure ammunition for overseas expansion.
sooyeon@yna.co.kr
(END)
assets through a private equity fund in a bid to accelerate large firms'
restructuring, the bank's chief said Wednesday.
Local banks are in the process of revamping highly leveraged companies, including
large firms, to head off their negative impact on the economy. But risk-averse
banks and companies are under fire for dragging their feet amid budding signs of
an economic recovery.
"To accelerate the corporate revamp drive, KDB plans to purchase assets held by
conglomerates through a private equity fund and later share profits with them,"
Min Euoo-sung, chairman of the state policy lender, told a press conference.
His remarks come as liquidity-squeezed large business groups are expected to sign
agreements with creditor banks calling for enhancing their financial health this
month.
According to KDB, if the asset sales generate profits, the policy lender plans to
share part of the revenue with the business groups in question to help dispel
concerns over the sales at a sharp discount. KDB also will provide them with the
right to buy assets back from the lender so as to allow them to regain management
after market conditions improve.
The move comes amid growing concerns that a possible chain reaction of business
failures would undermine the soundness of the banking sector, dealing a harsh
blow to the economy.
Meanwhile, Min repeated his interest in acquiring a lender in a bid to gain a
retail banking business prior to a planned privatization.
In late April, the National Assembly passed a law on KDB privatization. The
government, which owns 100 percent of the lender, plans to put KDB and its three
affiliates under a holding company in September and will start to reduce the
stake within five years.
"KDB is considering buying a lender in the domestic or Asian markets to secure
the deposits," Min said. He added a possible takeover would come before the
government starts to sell the state-run lender.
Recently, shares of Korea Exchange Bank, controlled by U.S. equity fund Lone Star
Funds, jumped on expectations that KDB is interested in buying the bank.
KDB said it will seek to list shares of an envisioned holding company either on
the Seoul bourse or overseas stock markets, or simultaneously within two to three
years to secure ammunition for overseas expansion.
sooyeon@yna.co.kr
(END)
