May 15, 1999
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| May 15, 1999 | atimes.com | |
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| The Koreas Seoul to inject $2.5bn in Korea First Bank as sale delayed By Yoolim Lee and Moon Ihlwan Bloomberg News Seoul - South Korea said it will inject an additional 3 trillion won ($2.5 billion) into Korea First Bank while its planned sale of the lender to Newbridge Capital Ltd. is delayed. The government again failed to reach an agreement to sell the state-owned bank to U.S.-based Newbridge after extending the deadline by 10 days, until Wednesday. ''It is urgent to normalize the bank's business,'' said Nahm Sang-duck, director general of the Financial Supervisory Commission's banking bureau. Nahm denied a newspaper report that talks to sell a stake in Korea First to Newbridge had collapsed. He said the government is studying a new takeover plan from Newbridge, backed by Richard C. Blum & Associates and Texas Pacific Group. Newbridge was the first foreign company to agree in principle to take over an ailing South Korean bank, a move that has helped restore the perception that the country is committed to the overhaul of its sick banking system. A collapse of the deal could backfire on the government's efforts to regain confidence in its policies and the Korean economy. The government said it is firmly committed to selling Korea First to foreign investors, although it is injecting at least 3 trillion won more. It spent 1.5 trillion won last year to take a more than 94 percent stake and keep the bank afloat. Korea First was forced to halt lending to its clients because its mounting losses wiped out its capital. Nahm, whose bureau is in charge of selling the bank, said Newbridge made a new proposal, shortly before the latest deadline for negotiations on the sale expired. ''Newbridge made a completely new proposal and it may take some time to analyze it,'' said Kim Bum-seok, an official in Nahm's bureau. ''We are not looking for another buyer now,'' although exclusivity has expired. The government signed a non-binding memorandum of understanding with Newbridge in December, giving it exclusive rights until May 2 to buy 51 percent of Korea First. | |||||||||
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