Kamco to Provide Funding Support to Companies Showing Signs of Insolvency and Under Workout in the First Half of Next Year

Resolution of the Cabinet Meeting on the Amendment to the Enforcement Decree of the Act on the Establishment of Korea Asset Management Corporation

[Asia Economy Reporter Sim Nayoung] Korea Asset Management Corporation (KAMCO) is creating a new financial support program for companies showing signs of insolvency or those undergoing workout processes.

On the 13th, the Financial Services Commission announced that the amendment to the Enforcement Decree of the Korea Asset Management Corporation Act, which establishes the legal basis for KAMCO to support companies showing signs of insolvency, has passed the Cabinet meeting.

The amendment expands the scope of KAMCO's lending and payment guarantees. Based on this, it includes companies showing signs of insolvency, those undergoing workouts, and even graduated companies, allowing broader support for the early normalization of temporarily insolvent companies than before.

Previously, the support scope of special purpose corporations established by KAMCO was limited to companies undergoing court rehabilitation procedures or those that had graduated from such procedures.

A company showing signs of insolvency refers to a company that the main creditor bank recognizes, through credit risk evaluation, as being in a state where normal debt repayment is difficult without additional external funding beyond regular borrowing.

A workout company refers to a company among those showing signs of insolvency that has initiated a joint management process through the resolution of the financial creditors' council.

Due to concerns that companies showing signs of insolvency and workout companies face difficulties in early normalization because of insufficient new financial support, the government has been promoting the establishment of a financial support program through KAMCO.

Following the amendment of the enforcement decree, KAMCO plans to launch the support program for companies showing signs of insolvency and workout companies in the first half of next year.

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