By Yoon Ja-young
Staff Reporter
Korea Development Bank (KDB) will convert into a financial holding company this year and seek privatization next year. The state-run bank will sell its stake in non-financial businesses first to shed weight before privatization, a top financial regulator said.
``KDB and its subsidiaries will be adopting a financial holding company system this year, and shares will start being sold next year, taking market conditions into account,'' Financial Services Commission Chairman Jun Kwang-woo said in a press meeting Thursday.
Jun said the financial holding company will be based on advanced governance structures to maximize value. ``Proceeds from KDB sales will be used to set up a `Korea Investment Fund,' which will take charge of policy financing.''
He said KDB will continue its role as foreign exchange financier even after privatization. ``We will take measures to substitute KDB's role of stabilizing the market, which includes corporate restructuring.'' Support on small-and medium-sized firms through the Korea Credit Guarantee Fund and Kibo Technology Fund will also undergo revision.
The chairman said the bank should sell its stake in non-financial businesses before privatization to facilitate the privatization process.
Among these firms are Daewoo Shipbuilding & Marine Engineering, Hyundai Corporation, Hynix, Hyundai Engineering & Construction, and SK Networks. KDB holds a 31 percent stake in Daewoo, 22.5 percent in Hyundai Corporation, and 14.7 percent in the construction company.
KDB's investment in these five companies has totaled 1.6 trillion won since 2000. The bank's stake in these five non-financial businesses is valued at 5 trillion won. ``Attractive businesses put up for sale will give a spark to the M&A market and help reorganize local industries,'' Jun said.
Regarding the sale of Korea Exchange Bank (KEB) by the U.S. Lone Star fund, Jun said legal uncertainties should be cleared first. The commission, however, should see if the delay of sales causes economic side effects or hampers the development of the financial industry, the chairman added.