June 25 (Reuters) – The state-run debt clearer, Korea Asset Management Corp (KAMCO), will buy 4.4 trillion won ($3.7 billion) worth of property-related loans held by savings banks by the end of this month, a top regulator said on Friday.
The purchase from unidentified 63 thrifts will value the loans at 74-80 percent of their book or face price, with the total including interest-service costs, the Financial Supervisory Service said in a statement.
In return, the savings banks who sell the loans to KAMCO are required to sell assets or raise fresh capital. in self-rescue measures.
It is part of the government effort to calm market concerns over the financial sector’s struggle with unpaid bills from builders as the construction industry has yet to show signs of a recovery.
Creditor banks reviewed 12.5 trillion won of project finance loans extended by 91 savings banks between April and May, and classified about one third of them deemed troubled.
($1=1188.5 Won) (Reporting by Kim Yeon-hee; Editing by Tomasz Janowski)