[Sponsored Report] Gov’t effort to sell off Ssangyong continues to no avail

Ssangyong E&C will continue its operations for an undetermined period of time with the government as its major shareholder. The deadline to settle the bad loan fund is fast approaching with less than a month left. But the government now has a legal grounds to possess the portion even if the fund is cleared out.

The government held a cabinet meeting on Nov. 13 and approved the revision of the Public Capital Redemption Fund Act which modifies which organizations will manage and sell off the returned asset as well as which methods of operation will be used for returned asset.

Korea Asset Management Corporation (KAMCO) is currently managing “bad loans,” which consist of shares of Ssangyong E&C and Daewoo Shipbuilding & Marine Engineering, but the fund management will end on Nov. 22 and within three months from the deadline, the shares will be returned after going through liquidation. The revision also includes equities and other products which could be returned.

Through the amendments to the bill, KAMCO does not have to sell off the shares to a third party and management insecurity has been reduced. The government also secured more time to promote selling off the shares of these companies. Theoretically, Ssangyong E&C can remain as a state-run company until the deadline of public capital, in 2027.

The Public Fund Oversight Committee plans to put an agency in charge of these companies’ asset and equity management and sales. The agencies will liquidate the equities at an opportune time and will return them to the public capital management fund, which the Ministry of Strategy and

Finance is managing for monetary bond redemption. The agency will be receiving deliberation and adjustment from the committee and will need to work to sell off the tangible assets at a reasonable price. The agency could be KAMCO, Korea Deposit Insurance Corporation (KDIC) or private financial companies such as securities companies.

KAMCO has tried to sell off the Ssangyong E&C shares four times this year, but so far has not seen success.

Park Min-woo, an official of the oversight committee, said, “A clear legal guideline has been set up for equities which the bad loan fund management period has ended. There is no change in our plan to continue to sell Ssangyong E&C.”