Bad-Debt Agency Gives Some Credit To Diners Club Korea Recovery Plan

The Korea Asset Management Corp., the state-run bad-loan agency, said Monday that it has set up a corporate restructuring vehicle for Diners Club Korea to help the credit card firm recover.

The restructuring company, First CRV, will start with capital of 173.2 billion won ($132.8 billion). The asset management firm invested in the new company 511.6 billion won worth of its credit in the ailing credit card firm, and three other creditors put up 11 billion won of their loans.

First CRV will sell a 50 percent stake in itself to raise cash to buy Diners Club Korea's debts from its two remaining lenders, Nara Investment Banking and Seoul Investment Trust. The successful bidder would take control of the restructuring firm and be able to appoint a manager of its assets to facilitate Diners Club's recovery.

The bidding, set for Aug. 21, will start at 170 billion won.

by Chung Sun-gu