Korea Development to Get Holding Company in October

South Korea will form a holding company for Korea Development Bank and its three affiliates by the end of October as it prepares to privatize the state lender, the nation’s financial regulator said.

Some assets of the Seoul-based bank will be transferred to the holding company and a new state-owned entity, the Financial Services Commission said today in an e-mailed statement. Korea Development will keep 142.6 trillion won ($115 billion) in assets after the split, according to the regulator.

Korea Development will transfer its holdings in Hynix Semiconductor Inc. (000660) and Hyundai Engineering & Construction Co. (000720) to the new entity, to be called Korea Public Banking Corp., or KPBC, the regulator said. That will be spun off to become a state lender before the government trims is stake in Korea Development. KPBC will also get shares of Daewoo International Corp. (047050), SK Networks Co. and Korea Aerospace Industries Ltd. (047810)

Some 15 trillion won worth of Korea Development holdings in state agencies including Korea Electric Power Corp. (015760) and Industrial Bank of Korea will also be shifted to KPBC, the regulator said. KPBC will have total assets of 28 trillion won when it’s set up in October, it added.

To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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