Seoul, Dec 24: Creditor banks will consider writing down ailing LG Card's capital to facilitate the sale of South Korea's largest credit card company, bank officials said today. Another troubled card company, Korea Exchange Bank (KEB) credit service, has resumed its cash advance service but its liquidity crunch is far from being eased, analysts said.
An official of Woori Bank, a key creditor managing LG Card's sale, said representatives of the bank and seven other creditors would meet later today to make the terms of the sale more attractive to potential buyers.
Creditors are moving to carry out a write-down of existing equity in the card firm, a move that would require shareholders to share the burden of bailing it out, he said.
They will also consider increasing the amount of debt they will convert into equity in any deal, the official said, adding: "It's to make LG Card's sale price more attractive in the end."
The auction of South Korea's largest credit card company has been put off until Friday after the sale, limited to the eight local lenders, failed to generate any offers by yesterday. Bureau Report