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Korea to buy Daewoo debt?
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December 3, 1999: 3:33 a.m. ET
Reports: government may buy debt to speed restructuring process
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LONDON (CNNfn) - The Korean government is studying plans to buy the debt in collapsed conglomerate Daewoo from overseas creditors, according to reports Friday.
Daewoo collapsed amid a welter of borrowings but the huge firm was propped up by a government brokered rescue package involving Korean banks.
International investors holding Daewoo debt are unhappy with those plans, according to the Wall Street Journal, and could derail the whole rescue process.
As a way to circumvent such problems, government officials have suggested Korean banks could buy the debt from overseas creditors and hand the distressed securities on to state-backed institutions.
Yonhap News Agency reported that Lee Hun Jai, chairman of South Korea's Financial Supervisory Commission, said Friday, "If necessary, domestic creditors could take over Daewoo's foreign debt first and hand it over to the state-run Korea Asset Management Corp (KAMCO)."
Daewoo and its subsidiary firms are estimated to have more than $75 billion in outstanding debt, with some $5 billion held by overseas banks, according to the Journal.
Although the terms on which investors could sell Daewoo debt have yet to be established, the new plan could enable the restructuring of the ailing conglomerate to proceed. 
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Daewoo
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