For SMEs that are undergoing temporary business difficulties despite their underappreciated growth potential, KAMCO provides liquidity and business management consulting services to support corporate management normalization.
After the Asian Financial Crisis in 1997, KAMCO acquired KRW 111 trillion worth of NPLs using the NPL Resolution Fund. Among them, 70% were corporate related portfolios.
KAMCO tried to revitalize corporations rapidly utilizing debt-to-equity swaps, debt rescheduling and providing new funds to corporations. KAMCO led revitalization of 12 Daewoo affiliates, and supported other rehabilitation processes for various corporations including conglomerates under workout plans.
In response to the Global Financial Crisis in 2008, the Corporate Restructuring Fund was established at KAMCO in 2009. The Corporate Restructuring Fund provided liquidity to shipping companies and construction companies by utilizing the Shipping Fund and CR-REITs, preventing the risk of insolvency preemptively to improve the soundness of financial institutions.
KAMCO will contribute to the development of the Korean economy by supporting corporate restructuring as a permanent restructuring institution.
On the back of the government's ‘Support Plan for Corporate Structure Innovation’ (Dec., 2017), KAMCO established the ‘Corporate Structure Innovation Support Center’ in March 2018 to support normalization of work-out companies. The Center is a market-oriented corporate restructuring hub connecting capital market investors with SMEs in need of inducing investment. For easy access and convenience, KAMCO has opened 27 off-line branches across the country and on-line platform "On-Corp." In addition, KAMCO will acquire workout companies' loans owned by the public financial institutions and state-owned banks to support their normalization. Also, it will provide financial supports through Debtor-In-Possesion (DIP) financing and the Sale and Leaseback program to help companies with technological prowess continue to run their businesses. KAMCO will also raise the Corporate Structure Innovation Fund of more than KRW 1 trillion with commercial banks and Korea Growth Investment Corporation to support the recovery of SMEs, one of the important and precious assets of the Korean economy.
KAMCO operates the Sale and Leaseback program to support normalization of SMEs that have growth potential but suffer from temporary liquidity issues. After selling its core business assets such as plants and office buildings to KAMCO, a company can lease them to maintain their business operation. By exercising preemption, it can repurchase properties back after management normalization. Since 2015 when it first launched the program, KAMCO has provided KRW 232 billion worth of liquidity to 17 companies as of the end of 2017. In 2017 only, it acquired 112 billion won of assets of 9 companies, which was a record high and 170% of the previous year's acquisition of KRW 65.9 billion. In 2018, KAMCO increased the program's financial size to KRW 150 billion in line with the government's economic policies and reduced the property tax imposed on the acquired assets by 50% to reflect on cutting down the rent, so as to strengthen the effect of the program and give stronger motivations to companies.