S. Korea mulling investment in-kind for IBK

SEOUL, Oct. 21 (Yonhap) -- The South Korean government is considering passing on its stake in retail giant Shinsegae Co. to the state-owned Industrial Bank of Korea (IBK) in a bid to help cash-strapped smaller firms, sources said Tuesday.

The government holds a 3.5 percent stake in Shinseage, the nation's top retailer,
whose value reached 307 billion won (US$233 million), based on Monday's closing
price. IBK caters mainly to small and medium enterprises.
"The government is mulling transferring its shares in Shinsegae to IBK, but
nothing specific has been decided," an official at the Finance Ministry said.
The government is also considering making an investment in-kind in IBK in
exchange for receiving redeemable preferred stocks from the lender, according to
sources.
The move comes after the government said Sunday that it plans to inject 1
trillion won into IBK in a bid to raise the lender's lending capacity by 12
trillion won for smaller companies as part of sweeping measures to calm the
financial markets.
South Korean smaller companies are suffering from cash shortages as banks have
become increasingly reluctant to extend loans to them amid the global financial
turmoil.
The government currently owns 57.7 percent of IBK whose capital stood at 2.3
trillion won.
sooyeon@yna.co.kr
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