Kamco Implements Support Measures to Overcome COVID-19

[Asia Economy Reporter Kwon Haeyoung] Korea Asset Management Corporation (KAMCO) announced on the 9th that it will implement support measures across its operations to assist vulnerable groups affected by the COVID-19 pandemic, including small and rehabilitating enterprises, the shipping industry, small business owners, and financial debtors, aiming to boost economic vitality.

First, for small and rehabilitating enterprises affected by COVID-19, KAMCO will reduce rent by 25% until the end of August for companies supported under the 'Asset Purchase and Leaseback Program' and small business tenants of the respective buildings. A total of 61 companies are expected to benefit, and newly applying companies this year will be allowed to defer 30% of their rent payments for the initial two years.

The scale of DIP (Debtor-in-Possession) financing support for new funds to small enterprises undergoing rehabilitation procedures will be expanded to 60 companies, up to 45 billion KRW, with preferential support for affected companies. For PEF (Private Equity Fund) investments in rehabilitating small enterprises, KAMCO plans to increase its LP (Limited Partner) investment ratio from the current 30% to 50% to facilitate early recovery through smooth capital procurement for affected companies.

Additionally, to support the shipping industry exposed to direct and indirect damage due to the shipping industry downturn and COVID-19 impact, KAMCO will expedite the execution of its annual 100 billion KRW investment in the KAMCO Ship Fund during the first half of the year.

To alleviate rent burdens on small business owners, the rental rate for national property will be reduced from the current 2.5-5% to 1% from this month through the end of the year, with rent reductions of up to 80%. For tenants of national buildings such as the 'Narakium Jeodong Building,' developed and managed by KAMCO under delegation from the Ministry of Strategy and Finance, as well as tenants in buildings owned by KAMCO, monthly rent will be discounted by up to 50%, capped at 20 million KRW annually.

To activate construction investment and supply liquidity, 44 billion KRW of construction costs for entrusted development projects on shared property will be expedited, and contract procedures for entrusted development projects on national property will be shortened to enable early disbursement of construction costs.

Debt adjustment is also underway to support credit recovery for small business owners and individual debtors who have suffered direct damage such as sales decline due to the prolonged COVID-19 pandemic. Since the 12th of last month, KAMCO has been reducing up to 90% of debts for debtors in special disaster areas including Daegu, Cheongdo, Gyeongsan, and Bonghwa, as well as for daily and wage earners whose income has decreased due to unemployment, leave of absence, or wage arrears, and is deferring repayments for up to six months for those already repaying debts.

For secured debtors residing in special disaster areas, KAMCO plans to exempt overdue interest charges in case of debt delinquency and postpone the execution of collateral rights until after the crisis alert is lifted.

KAMCO plans to purchase up to 2 trillion KRW worth of overdue claims from financial companies to support credit recovery for small business owners and individual debtors. This was discussed at the 4th Emergency Economic Meeting. KAMCO will use its own funds to purchase claims from debtors who find it difficult to receive support through financial companies or the Credit Recovery Committee, providing support such as repayment deferral, debt reduction, and long-term installment repayment.

Moon Sung-yoo, President of KAMCO, stated, "We will pool our operational capabilities to ensure practical and prompt support is provided to economically vulnerable sectors struggling due to the prolonged COVID-19 pandemic."