KAMCO Improves Support System for Business Rehabilitation of Restructured Companies

Expansion and Strengthening of the Role in Supporting Rehabilitation Companies to Overcome the COVID-19 Crisis and Promote Business Recovery

[Asia Economy Reporter Kwangho Lee] Korea Asset Management Corporation (KAMCO) announced on the 20th that it will implement institutional improvement measures to help companies undergoing court rehabilitation procedures, who are struggling with debt repayment and implementation of rehabilitation plans due to the prolonged COVID-19 pandemic, to normalize their operations.

This institutional improvement was promoted with a focus on strengthening KAMCO's role in supporting the practical revival of companies by alleviating the financial and procedural burdens of rehabilitation companies, whose difficulties have increased due to COVID-19, following the revision of the Act on the Establishment of KAMCO.

Through this improvement plan, KAMCO provides a foundation for early normalization of rehabilitation companies with high going-concern value by expanding debt restructuring for companies with decreased sales, extending the debt restructuring agreement period, relaxing the consent criteria for rehabilitation plans, and supporting the maintenance of business bases such as factories.

Specifically, for rehabilitation companies facing difficulties in debt repayment due to decreased sales caused by COVID-19, a new provision has been established to allow lowering interest rates by comprehensively considering financial status and rehabilitation plans, thereby easing the financial burden on rehabilitation companies.

In addition, the uniform debt repayment period (up to 10 years) applied under the rehabilitation plan will be extended by up to 5 years for companies that have passed more than 50% of the repayment period.

Furthermore, the criteria for consenting to rehabilitation plans will be relaxed to allow companies whose total debt in the previous year is 1.5 times or more of total assets to agree, and interest burdens under the rehabilitation plan will also be eased considering financial status.

Kim Gwisoo, Head of Corporate Support Division at KAMCO, said, "We hope that this improvement plan will contribute to the prompt normalization of management for rehabilitation companies struggling due to COVID-19," and added, "Going forward, KAMCO will continue to operate support systems flexibly from the perspective of rehabilitation companies to provide practical help for their management normalization."

This content was produced with the assistance of AI translation services.