Summary of Proposed Investment
Project Number
9488
Company Name
KOREA DEVELOPMENT CO.,LTD.
Date SPI Disclosed
Jan 6, 2000
Country
Korea, Republic of
Industry
Financial Markets
Status
Completed
Sector
Leasing Services
Department
Regional Industry - FIG Asia & Pac
Environmental Category
FI
Previous Events
Approved : Jan 24, 2000
Signed : Jan 25, 2000
Invested : Apr 27, 2000
Project Description
Summary Of Project Information (SPI)
RegionAsia and the Pacific
Sector
Project No009488
Projected Board DateFebruary 7, 2000
Company NameKorea Development Leasing Corporation
Technical Partner and/or Major Shareholders
The technical partner for the restructuring project is ORIX Corporation, which is currently Korea Development Leasing Corporation’s (KDLC) major shareholder.
Project Cost Including proposed IFC investment
The total project cost for the restructuring is estimated at US$2.6 billion. IFC proposes to (i) extend up to KRW20 billion (US$16.5 million) as part of a KRW100 billion (US$83 million) convertible bond issued by KDLC - subscribed by ORIX Corporation and IFC; (ii) IFC will also consider an A Loan of up to US$20 million; and (iii) a B Loan of up to US$30 million subject to market demand.
Location of project and Description of site
KDLC is headquartered in Seoul and has an additional three branches across Korea.
Description of Company and Purpose of Project
IFC is helping to restructure Korea Development Leasing Corporation after the Korean crisis. The proposed project would represent IFC''s continued support for KDLC, in which IFC first invested in August 1977. The transaction involves supporting the efforts of KDLC to restructure its operations and financing to initiate the underwriting of new lease contracts in an emergent leasing industry.
IFC has a long-standing relationship with KDLC both as a shareholder and joint venture partner. Going forward, IFC proposes to remain engaged with KDLC as a key driver of the Company''s successful restructuring. IFC was instrumental in the establishment of KDLC''s joint venture leasing companies in Bangladesh in 1985 (Industrial Development Leasing Company of Bangladesh), in Thailand in 1991 (Ayudhya Development Leasing Co., Ltd.), and in Indonesia in 1994 (PT. KDLC BancBali Finance).
The developmental impact of the proposed project would be considerable. First and foremost, the financing that would be offered to KDLC would act as the catalyst for the underwriting of new lease contracts, thereby allowing the KDLC to re-engage the emerging leasing market. KDLC would therefore play a leading role in revitalizing the supply side of the market.
The transaction would represent a model of a lease company restructuring in action. KDLC would be one of the first firms to emerge from its restructuring and return to the market. KDLC''s restructuring, falling under the oversight of the Corporate Restructuring Coordination Committee (CRCC), is the first voluntary out-of-court, London-rules restructuring of a leasing company in Korea; out of 90 companies under CRCC-supervised restructurings, there are only two financial institutions and one leasing company. KDLC''s restructuring efforts also represent the first time in recent Korean history that foreign creditors have voluntarily agreed to write down debt for a Korean financial institutions.
The proposed project would also act as an important signal to various segments of the market. The investment is expected to highlight IFC''s confidence in the leasing industry’s future as a viable and well-run business. On a broader basis, participation in this project would underscore IFC''s continued support of the Korean government''s efforts to restructure domestic financial markets.
Environmental Category and Issues
This is a Financial Intermediary (FI) Type 2 project according to IFC''s environmental review procedure. KDLC will be required to undertake an environmental review of each subproject to ensure compliance with host country requirements, IFC environmental and social safeguard policies, and, if applicable, World Bank Group environmental, health and safety guidelines. IFC will assess KDLC''s capability to carry out environmental reviews. KDLC must obtain IFC clearance prior to making any investment with IFC funds in any Category A project.
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
| Project Name | Korea - KDLC Restructuring |
RegionAsia and the Pacific
Sector
Project No009488
Projected Board DateFebruary 7, 2000
Company NameKorea Development Leasing Corporation
Technical Partner and/or Major Shareholders
The technical partner for the restructuring project is ORIX Corporation, which is currently Korea Development Leasing Corporation’s (KDLC) major shareholder.
Project Cost Including proposed IFC investment
The total project cost for the restructuring is estimated at US$2.6 billion. IFC proposes to (i) extend up to KRW20 billion (US$16.5 million) as part of a KRW100 billion (US$83 million) convertible bond issued by KDLC - subscribed by ORIX Corporation and IFC; (ii) IFC will also consider an A Loan of up to US$20 million; and (iii) a B Loan of up to US$30 million subject to market demand.
Location of project and Description of site
KDLC is headquartered in Seoul and has an additional three branches across Korea.
Description of Company and Purpose of Project
IFC is helping to restructure Korea Development Leasing Corporation after the Korean crisis. The proposed project would represent IFC''s continued support for KDLC, in which IFC first invested in August 1977. The transaction involves supporting the efforts of KDLC to restructure its operations and financing to initiate the underwriting of new lease contracts in an emergent leasing industry.
IFC has a long-standing relationship with KDLC both as a shareholder and joint venture partner. Going forward, IFC proposes to remain engaged with KDLC as a key driver of the Company''s successful restructuring. IFC was instrumental in the establishment of KDLC''s joint venture leasing companies in Bangladesh in 1985 (Industrial Development Leasing Company of Bangladesh), in Thailand in 1991 (Ayudhya Development Leasing Co., Ltd.), and in Indonesia in 1994 (PT. KDLC BancBali Finance).
The developmental impact of the proposed project would be considerable. First and foremost, the financing that would be offered to KDLC would act as the catalyst for the underwriting of new lease contracts, thereby allowing the KDLC to re-engage the emerging leasing market. KDLC would therefore play a leading role in revitalizing the supply side of the market.
The transaction would represent a model of a lease company restructuring in action. KDLC would be one of the first firms to emerge from its restructuring and return to the market. KDLC''s restructuring, falling under the oversight of the Corporate Restructuring Coordination Committee (CRCC), is the first voluntary out-of-court, London-rules restructuring of a leasing company in Korea; out of 90 companies under CRCC-supervised restructurings, there are only two financial institutions and one leasing company. KDLC''s restructuring efforts also represent the first time in recent Korean history that foreign creditors have voluntarily agreed to write down debt for a Korean financial institutions.
The proposed project would also act as an important signal to various segments of the market. The investment is expected to highlight IFC''s confidence in the leasing industry’s future as a viable and well-run business. On a broader basis, participation in this project would underscore IFC''s continued support of the Korean government''s efforts to restructure domestic financial markets.
Environmental Category and Issues
This is a Financial Intermediary (FI) Type 2 project according to IFC''s environmental review procedure. KDLC will be required to undertake an environmental review of each subproject to ensure compliance with host country requirements, IFC environmental and social safeguard policies, and, if applicable, World Bank Group environmental, health and safety guidelines. IFC will assess KDLC''s capability to carry out environmental reviews. KDLC must obtain IFC clearance prior to making any investment with IFC funds in any Category A project.
| Date SPI sent to InfoShop | January 6, 2000 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
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