To Facilitate Workout of Insolvent Companies
The state-run Korea Development Bank (KDB) is planning to establish an asset management subsidiary which is in charge of the sale and restructuring of the companies put under its management, according to financial authorities on Jan. 16.
Until now, the KDB has engaged in financial restructuring of the companies that were put under a workout program, such as liquidity support and adjustment of the debt to equity ratio. For matters such as spinning off some divisions of those companies, it has relied on external experts.
Yet questions have often been raised over the professionalism of the external experts. The KDB also faced many limitations in providing additional funds as it is basically not an asset management company. The KDB is seeking to overcome these limitations by establishing an asset management subsidiary which is not regulated by the Banking Act.
The KDB is planning to hire outside experts to form an expert group for the asset management firm, which will be staffed with 20 to 30 employees.