The Korea Asset Management Corporation (KAMCO) is expected to establish the 6th corporate restructuring fund this year to support the struggling petrochemical sector. The financial sector anticipates that KAMCO will create a fund of 1 trillion won, which is double the originally planned amount.
According to the financial sector on the 13th, KAMCO will carry out a blind fund investment project to establish the 6th corporate restructuring fund. KAMCO aims to establish the fund within this year, and the investment project notice is expected to be issued as early as the third quarter.
The corporate restructuring fund is a policy fund launched in 2018 to promote restructuring centered on the capital market. It supplies funds to corporations undergoing rehabilitation or workout (corporate financial restructuring) by forming a master fund based on policy funds and attracting private capital.
Originally, there were no plans to create the 6th fund this year as the relevant budget was not allocated. The financial services commission secured 50 billion won in additional budget in June, leading KAMCO to proceed with the fund establishment.
Based on the budget of 50 billion won, KAMCO plans to raise more than 500 billion won by receiving investments from the Industrial Bank of Korea, Export-Import Bank of Korea, and the corporate bank. After investing in a fund (sub-fund) created by a delegated operator (GP), it is forecasted that they will secure over 1 trillion won by additionally soliciting private funds.
Through the 6th fund, KAMCO plans to support not only restructuring corporations but also those affected by the U.S. reciprocal tariffs and sluggish domestic demand. The petrochemical sector, facing a crisis due to the low-price offensive from Chinese and Middle Eastern corporations, is also expected to be included as a support target. Since KAMCO has included "corporations showing signs of distress" in the fund support target from the 5th fund, petrochemical corporations recording substantial deficits also meet the support criteria.