$60 billion divided between three companies?
Could this be huge?
biz.yahoo.com
Friday June 25, 2:29 am Eastern Time
INTERVIEW-SKorea to set up asset management jvs
By Yeom Yoon-jeong
SEOUL, June 25 (Reuters) - State-run Korea Asset Management
Corp (KAMCO) will set up three joint ventures this year to
rehabilitate non-performing loans (NPLs) bought from domestic financial institutions, a senior company
official said on Friday.
''KAMCO is in the process of establishing joint ventures with experienced foreign companies this
year,'' managing director Huh Kyungman said in an interview with Reuters Television.
Huh said KAMCO would choose in July three partners from five asset-management candidate
companies, including U.S.-based Bankers Trust, J. Robert, Amresco Inc (Nasdaq:AMMB - news),
Lone Star Fund and Archon in which Goldman, Sachs and Co holds a 94 percent stake.
''Each joint venture is expected to deal with NPLs of between one and three trillion won in face value,''
he said.
KAMCO and its partners planned to set up three separate special purpose companies which would try
to rehabilitate NPLs taken over from KAMCO.
Huh said KAMCO would clear NPLs valued at about 70 trillion won ($60 billion) which it had bought
and planned to buy from financial institutions within five years and would dispose of half within the next
three years as agreed with the World Bank.
He said he was confident the five-year target could be met.
But he added: ''What we have to focus on now is how we can attract investors who are interested in
our assets. To enhance the value of our less-attractive assets before putting them on the market is the
biggest obstacle (for us).''
''Of course, KAMCO has less attractive assets in our portfolio. But KAMCO is putting assets on sale
based on their loan classification,'' Hur said.
He said KAMCO had sold assets based on the availability of put-back options in order to improve its
asset-backed securities (ABS) credit rating.
Earlier this month, KAMCO sold 320 billion won in ABS backed by restructured corporate loans
bought from five healthy commercial banks.
The bonds carried a put-back option that the banks would buy them back if loan borrowers failed to
pay interest for six months.
The government has designated KAMCO to purchase NPLs from local financial institutions and to
carry out public auctions of the loans.
After selling 208 billion won worth of NPLs to Goldman Sachs at 25.5 billion won or 12.25 percent of
the face value last October, KAMCO has sold a total of 1.7 trillion won worth of NPLs through
international auction.
On Wednesday, it sold 1.04 trillion won worth of NPLs at an average of 50.6 percent of value to Lone
Star Fund. Auction proceeds totalled 524.9 trillion won or $455 million.
''We will use all the money to recapitalise banks,'' Huh said. ''We will essentially purchase additional
bank NPLs with the money.''
Prices for Korean debt purchased by foreigners have been rising in line with the country's economic
recovery.
The executive said the price may go to the pre-crisis average level of 69 percent.
''I think it's the maximum possible price. I think it will reach that level from 2001,'' he said.
($ equals 1,160 won)
|
