IBK Financial Group-Yuamco Establish 150 Billion KRW Real Estate PF Normalization Fund

Support for Normalization Including Bond Underwriting, Bond Restructuring, and Equity Investment

At the 'PF Normalization Fund Formation Business Agreement Ceremony' held on the 24th at IBK Finance Tower in Euljiro, Seoul, (from left) Seo Jeong-hak, CEO of IBK Investment & Securities, Lee Sang-don, CEO of Union Asset Management, Choi Kwang-jin, Vice President of IBK Corporate Bank CIB Group, and Ham Seok-ho, CEO of IBK Capital, are posing for a commemorative photo after the agreement ceremony.

IBK Industrial Bank announced on the 25th that it has signed a business agreement with IBK Financial Group and Union Asset Management Company (UAMCO) for the formation of a 'Project Financing (PF) Normalization Fund.'

Through this agreement, the two institutions plan to establish a fund worth 150 billion KRW to support the normalization of PF projects by acquiring bonds of distressed or potentially distressed projects, restructuring bonds, and making equity investments. IBK Financial Group (IBK Industrial Bank 50 billion KRW, IBK Capital 10 billion KRW, IBK Investment & Securities 10 billion KRW) contributed 70 billion KRW, and UAMCO invested 80 billion KRW.

UAMCO, which manages the fund, is a specialized company in distressed bond investment and management that has experience in normalizing 29 distressed projects by acquiring them through the PF Normalization Bank during the global financial crisis-induced PF distress situation.

The fund being established is part of the 'PF Project Normalization Support Fund' promoted by the Financial Services Commission and is expected to play a role as a savior to stabilize the market at a time when risks in the real estate PF market have increased.

An IBK Industrial Bank official said, “The real estate PF business involves numerous small and medium-sized enterprises in construction, transportation, landscaping, materials, and supervision, so the ripple effect on related companies and the regional economy is significant,” adding, “We expect this fund to play a positive role in the cash flow of SMEs.”