Vice Minister Gi: "Support for PF Project Site Restructuring"

Kim Byung-hwan, First Vice Minister of the Ministry of Economy and Finance, visited real estate project financing (PF) sites on the 18th and urged the related industries to make efforts for the smooth landing of PF.

Vice Minister Kim toured PF sites undergoing restructuring and exchanged opinions with industry representatives on the progress of the projects so far and future restructuring plans.

Kim Byunghwan, 1st Vice Minister of Strategy and Finance.

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He emphasized that the key to normalizing real estate PF is the swift restructuring of projects that have business viability but are unable to proceed due to various cost increases and conflicts among stakeholders.

He then listened to suggestions and difficulties from various stakeholders related to PF projects, including developers, construction companies, Korea Asset Management Corporation (KAMCO), and private operators of the PF normalization fund, through a real estate PF industry meeting.

Vice Minister Kim stressed that although signs of risk mitigation have appeared, such as a slowdown in the increase of real estate PF loan balances recently, efforts by the government and related industries for an orderly smooth landing of real estate PF are important given the large accumulated loan volume.

In particular, through tailored responses for each project site, sufficient liquidity will be supplied to normal projects via PF loan guarantees (25 trillion won) and construction guarantee associations (10 trillion won), while various measures to improve business viability, such as compliance with creditor agreements and restructuring by the PF normalization fund, will be supported for projects at risk of insolvency.

He also stated that distressed projects will be encouraged to promptly secure new business entities through auctions and public sales.

Furthermore, to expedite the normalization of real estate PF, an amendment to the 'Local Tax Special Cases Act' will be proposed in the first quarter of this year to provide a 50% temporary acquisition tax reduction until 2025 when PFVs within the PF normalization fund jointly invested by KAMCO and the private sector purchase project sites.

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