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troubled companies-restructuring support

State asset firm eyes injecting 140 bln won for corporate restructuring support

SEOUL. Jan. 12 (Yonhap) -- The state-run Korea Asset Management Corp. (KAMCO) is considering raising 140 billion won (US$95.3 million) to support the normalization and restructuring of troubled companies, industry sources said Monday.

The state-backed asset management agency has reviewed a plan to raise a total of 50 billion won to support the normalization of firms undergoing corporate rehabilitation processes, the sources said.

In addition, KAMCO is reviewing investing around 91.1 billion won in a policy fund to help companies undergoing restructuring. It is expected to submit such a plan to the Financial Services Commission on Tuesday.

Such a scheme was produced in response to an increase in companies showing signs of distress, burdened by high borrowing rates.

The average lending rate of major banks in South Korea increased for the third consecutive month in November, with the COFIX, or the Cost of Funds Index, a benchmark lending rate for mortgage loans, rising to 2.81 percent.

Corporate rehabilitation applications submitted to the court totaled 1,196 over the January-November period last year, up 21.5 percent on-year, according to the Seoul Bankruptcy Court.

The number of bankruptcy filings submitted also surpassed 2,000 in November, exceeding the previous high of 1,940.

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