Uamco Ltd., South Korea’s biggest buyer of bad debts from banks, plans an initial public offering by September 2013 as stricter capital rules and accounting standards encourage lenders to sell more troubled loans.
Uamco was set up in 2009 by six Korean lenders to house assets that deteriorated following the global financial crisis. The company now plans to buy bank loans made to developers for construction projects stalled by a real-estate slump.
Korean banks’ non-performing loans jumped 37% from a year earlier at the end of March, fueled by builder defaults. Seoul-based Uamco and seven lenders will form a private-equity fund this month to purchase as much as $2.3 billion worth of soured construction-project loans extended by banks.
CEO Lee Seong Kyu recently said he expects banks will become more willing to remove bad debt from their books to meet Basel capital requirement changes, and thus help stabilize the bad-loan supply.
A public listing in 2013 would occur about a year before the company is scheduled to be liquidated according to an agreement that the six shareholder banks made when it was formed in October 2009, the CEO said.
