KoFC to provide 100 trillion won fund

By Kang Seung-woo

Staff reporter

The Korea Finance Corporation (KoFC) will provide a 100 trillion fund by 2015 to nurture the nation's strategic businesses.

"The KoFC has set its vision to supply 100 trillion won to companies focusing on future-oriented industries, such as green industry and new growth engine industry," KoFC President Ryu Jae-han said during a press conference in Seoul, Monday.

The KoFC spun off from the Korea Development Bank (KDB) last October, as the first step by the state-run lender toward privatization, and assumes the public-financing functions of the KDB.

The fund will also invest in start-up companies, small- and medium-sized enterprises and social overhead capital (SOC).

"The KoFC will serve as an incubator to develop the new businesses," he said.

In order to supply the promised money, the state-run agency plans to increase the size of the supply with an annual growth of 30 percent.

"Starting from 6 trillion won this year, we will raise it by 30 trillion won annually by 2015," he said.

"To secure the funds, we will capitalize on the initial sum of 15 trillion won and low-interest loans, selling shares and raise foreign currencies."

If the KoFC meets its vision, it expects to see its assets reach 150 trillion won, create 250,000 jobs - approximately 42,000 per year - and generate production of 159 trillion won, representing 28.1 percent of the overall domestic figure.

Ryu said the corporation has already been determined to cooperate in the drive.

"Executives and employees have agreed not to set up a labor union until they reach the goal," the 55-year-old said.

Meanwhile, Ryu said that the KoFC creditors of Hyundai Engineering & Construction would begin the process to sell the construction company by the end of this month.

"Creditors of Hyundai Engineering will decide on the sales methods and take action by the end of June to sell the builder," he said.

The KoFC and other creditors, including the Korea Exchange Bank (KEB), are striving to sell their combined 38.51 percent stake in the company after the local builder ended its debt-rescheduling program in 2006. It holds an 11.12 percent stake in Hyundai Engineering.

The previous attempt to find a new owner in 2008 failed as the global financial crisis prevented merger and acquisition efforts.