A business blueprint was revealed by a corporate restructuring company (CRC) to be established in the middle of this Nov. According to the plan, the CRC will accumulate restructuring expertise and experiences by way of restructuring individual companies and, based on such expertise, will carry out sectoral restructuring in the mid to long-term.
A business prospectus by the CRC Establishment Preparation Committee says that a CRC will be founded by Korea Asset Management Corp. (KAMCO) and eight banks including KDB. They will invest 300 to 400 billion won (US$253 to $338 million) in the company in a type of capital call, which the CRC will ask for when necessary. In addition, the remaining 2 trillion won (US$1.7 billion) will be funded via loans.
The CRC is planning to invest in companies to be restructured via three PEFs for restructuring, liquidity support, and self-help plan support by raising private capital with private restructuring specialists and joint GPs. Restructuring funds will go into buying financial institutions’ claims on companies under restructuring, and use the claims for debt-equity swap. Liquidity support funds will focus on supplying funds to companies having difficulties due to a temporary shortage of funds.
Self-help plan support funds make purchases of corporate real estate sold for restructuring. Investment is divided into direct restructuring that buys non-performing loans from financial companies and indirect restructuring that purchases the assets and securities of restructured companies. If and when a structured company generates profit after investment, the profit will be given to investing firms.