KAMCO to buy 816.4 bln won of bad debts from banks

By Park Bo-ram
SEOUL, June 29 (Yonhap) -- South Korea's state debt-clearer Korea Asset
Management Corp. (KAMCO), said Monday it will purchase 816.4 billion won
(US$637.8 million) worth of troubled bank loans to help bolster their financial
health.

KAMCO agreed with 6 local banks to buy soured loans extended to 22 businesses to
finance construction projects, it said. It would not identify the lenders, citing
possible damage to their credibility.
"KAMCO expects the planned debt purchase will help shore up the financial
strength of local banks and help accelerate restructuring of construction firms,"
the debt-clearer said.
KAMCO has decided to create a 20-trillion-won fund by issuing state-guaranteed
bonds this year to finance its purchase of bad debts.
As part of a corporate restructuring drive, KAMCO has bought up 1.68 trillion won
worth of troubled project-financing loans from savings banks since last December,
it said.
Starting in July, KAMCO also plans to take over bad debts from other financial
firms, including insurers and securities and asset managers.
pbr@yna.co.kr
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