1. KAMCO’S EXPERIENCE 2nd Forum for Asian Insolvency Reform
Bangkok, Thailand 16 – 17 December 2002

2. PARTⅠ Overview on KAMCO NPL Acquisition & Resolution

3. Brief History of KAMCO Apr 6, 1962
Established as an agency responsible for the disposition of Non-Performing Assets of KDB
Nov 24, 1997
Mandated to acquire and dispose of non-performing loans of financial institutions and to manage the NPA Management Fund
Apr 1999
Further expanded its function as Bad Bank and do carry out more services related to corporate restructuring
Many of you seem to be unaware of the fact that KAMCO existed far before the Asian debacle.
Actually, KAMCO was established in 1962 as an intermediary agency of Korea Development Bank, the government owned entity. At this time, KAMCO sold bank NPLs and auctioned off confiscated property from the government on a fee basis.
KAMCO’s role has evolved dramatically since its establishment in In 1997 and 1998, the Korean government decided to set up the NPA fund to clean up the country’s astronomical amount of distressed assets in the aftermath of its worst financial crisis.

4. Main Functions of KAMCO
Management & operation of NPA Fund
Acquisition & resolution of NPLs
Workout of distressed companies
Management and sales of state-owned properties and confiscated properties for tax-arrears as mandated by the government
KAMCO executes the following operations:
Management of Non-Performing Assets management fund, acquisition & resolution of Non-Performing Loans, workout of distressed companies, and management & sales of state-owned properties & confiscated properties for tax-arrears as mandated by the government.

5. Classification of NPLs
Ordinary Loans
Loans currently in default for 3 months or longer whether they are secured or unsecured
Corporate Loans under In-court Restructuring
Loans to companies under court
reorganization or composition proceedings
whether they are secured or unsecured
Corporate Loans under Private Restructuring
Loans to companies under private workout programs,which have been agreed by
creditors for restructuring distressed assets
NPL acquired by KAMCO can be classified into three categories:
1st, Ordinary loans, of which payment has been delayed for three months or longer, whether secured or unsecured.
2nd, Loans to companies under court provision or liquidation proceedings, whether secured or unsecured, are classified as Corporate loans under in-court restructuring.
3rd, Loans to companies under private workout program are ‘Corporate loans under private restructuring’. Currently all the loans in this category are those to DAEWOO affiliates.

6. Resolution Strategies
Principles & Policies
Speedy, Loss Minimizing and Value Upgrading Resolution,
Efficient Management, Transparent Procedure and Fair Transaction
Disposition
Strategies
Workouts
Portfolio Sales
Securitization (ABS)
Public Sales
Foreclosure Sales
Individual Loan Sales
Suspension of Legal Action
Suspension of Foreclosure
Lend Working Capital
Debt-to-Equity Swap
Payment Guarantee
Purchase Discount notes (CPs)
Analysis of
NPLs
Restructuring
Joint Venture
KAMCO’s disposition strategy is “to dispose of NPLs as quickly and efficiently as possible.”
To finance the purchase of NPLs and maintain an appropriate level of liquidity in the NPA fund itself, KAMCO employs various disposition methods.
This slide shows the methods that KAMCO has adopted in disposing of individual portfolios. Those include:
• Portfolio Sales (with and without equity partnership)
• Issuance of Asset Backed Securities.
Public and Court Auctions
• Joint Venture Companies
Discount Outstanding Principal Balance
Reduce Interest Rate
Extend Payment Maturity
Corporate Restructuring Company
Asset Management Company
Corporate Restructuring Vehicle

7. Restructured Corporate Loans
NPL Acquisition
KAMCO Has Acquired USD bn in NPLs since November 1997.
(USD 1 = KRW 1,250)
(As of October 31, 2002, in billion U.S. Dollars)
Classification
Purchased
Face Value
Purchase Price
Purchase Price Ratio
Ordinary Loans
24.13
7.39
30.62%
Restructured Corporate Loans
32.92
13.58
41.26%
Workout Loans
1.77
0.38
21.49%
Daewoo Loans
25.87
10.17
39.33%
The table shows NPL Portfolio of KAMCO as of June 30
2001 in billion dollars.
KAMCO has acquired billion dollars of NPLs and, out of them, resolved billion dollars since November 1997.
Total
84.68
31.52
37.23%

8. Investment Trust Companies Foreign Financial Institutions
Purchase of NPLs by Type of Institutions
KAMCO Has Purchased NPLs from Various Financial Institutions
(As of October 31, 2002, in billion U.S. Dollars)
(USD 1 = KRW 1,250)
Types of Institutions
Loan Amount
Purchase Price
Purchase Price Ratio
Commercial Banks
49.15
19.65
39.98%
Merchant Banks
2.77
1.30
46.83%
Insurance Companies
5.89
1.45
24.64%
Investment Trust Companies
17.23
6.58
38.18%
Foreign Financial Institutions
3.98
1.67
42.10%
KAMCO has purchased NPLs from various financial institutions
You can see that KAMCO has bought 48.25% of NPLs from commercial banks and 17.05% of them from investment trust companies.
Others
5.67
0.87
15.39%
Total
84.68
31.52
37.23%

9. NPL Resolution By Diverse Methods
KAMCO Has Acquired USD bn in NPLs and Has Resolved
USD bn Since November 1997.
(USD 1 = KRW 1,250)
(As of October 31, 2002, in billion U.S. Dollars)
Resolution Methods
Accumulated Resolution
Ratio
Face Value
Purchase Value
Recovery Value
International Bidding
4.86
1.05
1.28
9.71%
ABS Issuance
6.42
3.37
3.31
12.82%
Sale to AMC
2.06
0.53
0.74
4.13%
Sale to CRC
1.48
0.29
0.54
2.96%
Individual Loan Sales
1.80
0.45
0.58
3.60%
Court Auction, Public Sales
6.60
2.07
2.55
13.19%
Collection
9.51
3.20
4.48
19.00%
Daewoo
1.95
1.38
1.68
3.90%
Sub Total
34.68
12.34
15.15
69.30%
KAMCO has disposed of billion us$ in NPLs over the past three years.
Disposition breakdown in shown on the slide including ABS issuance and int’l bidding at USD 6.10billion and 4.84 billion us$.
Recourse & Cancellation
15.36
8.11
8.11
30.70%
Total
50.04
20.45
23.26
100.00%
* Non-Cash Resolution (Debt-equity swap) : USD 1.57 billion

10. International Bidding (I)
International Auction(1) - Transactions of Restructured Corporate Loans
KAMCO 98-1
Investor : Goldman Sachs
Bid Date
9/1/98
Size
KRW Billion (USD 166 Million)
Sales Method
Int’l Auction
Structure
Profit Sharing, Distribute Residual Interest
Asset Manager
Purchaser
Upside Profit Sharing
KAMCO : 60%, Goldman Sachs : 40%
KAMCO 99-1
Investor : Goldman Sachs Consortium
Morgan Stanley Consortium
Bid Date
Now, let me go into further details of our sales.
First, International Auctions.
International Auction is a very crucial sales strategy KAMCO has utilized since it allows KAMCO to resolve huge volumes of NPLs.
Most of the NPLs resolved in the initial stage of resolution, when we focused on speedy resolution, were sold through this method.
The next two pages also show our international auctions, their sizes and the successful bidders in the auction.
The sales price to face value has improved significantly from the first auction to the last.
Lets skip these pages and go on to page 16, Asset Backed Securities.
5/27/99
Size
KRW Billion (USD Million)
Sales Method
Int’l Auction
Structure
Outright sales

11. International Bidding (II)
International Auction(2) - Transactions of Restructured Corporate Loans
KAMCO 99-2
Goldman Sachs Consortium
Investor : Morgan Stanley Consortium
Central Banking Corporation
Bid Date
11/10/99
Size
KRW 811 Billion (USD Million)
Sales Method
Int’l Auction
Structure
Outright sales
KAMCO
Investor : Goldman Sachs /
Morgan Stanley / Cerberus
Bid Date
7/26/2000
Size
KRW1,098 Billion (USD Million)
Sales Method
Int’l Auction
Structure
Outright sales

12. International Bidding (III)
International Auction(3) - Transactions of Ordinary Loans
KAMCO Secured NPL 98-1
Investor : Lone Star Fund II
Bid Date
12/9/98
Size
KRW Billion (USD Million)
Sales Method
Int’l Auction
Structure
Equity Partnership, Distribute Residual Interest
Asset Manager
J.V. AMC
Upside Profit Sharing
KAMCO : 40%, Lone Star Fund II : 60%
KAMCO Secured NPL 99-1
Investor : Lone Star Fund II
Bid Date
6/22/99
Size
KRW 1,038.8 Billion (USD 831 Million)
Sales Method
Int’l Auction
Structure
Outright sales
KAMCO Secured NPL 99-2
Investor : Goldman Sachs (2) Lone Star (1)
Morgan Stanley (5) Deutsche Bank(1)
Bid Date
12/8/99
Size
KRW 1,022.6 Billion (USD Million)
Sales Method
Int’l Auction
Structure
Outright sales

13. * Based on par value of contract signing date
ABS Issuance
Domestic & Foreign Asset Backed Securities(ABS) Issuance
(USD 1 = KRW 1,250)
(As of October 31, 2002 in million U.S. Dollars)
Description
Face Value
Sales price
Type
Mirae 99-1
244.0
236.0
Domestic
Mirae 99-2
308.0
260.0
Domestic
Mirae 99-3
190.4
164.0
Domestic
Mirae 99-4
232.8
181.6
Domestic
Mirae
292.8
248.0
Domestic
Mirae
256.8
236.0
Domestic
Mirae
331.2
276.0
Domestic
Mirae
396.0
160.0
Domestic
Mirae
289.6
252.0
Domestic
Korea Asset Funding
395.0
367.0
Foreign
Mirae
321.6
270.4
Domestic
Mirae
177.6
144.0
Domestic
Mirae
316.0
232.0
Domestic
Mirae
170.4
128.0
Domestic
Mirae
227.2
160.0
Domestic
Total
4,149.4
3,315.0
* Based on par value of contract signing date

14. ABS Issuance (International)
International Asset Backed Securities(ABS) Issuance
Issuance Date
7/28/2000
Product
Korea Asset Funding
Face Value
USD 395 Million
The amount
issued
USD 420 Million
- Joint Lead Managers : Deutsche Bank & UBS Warburg
- Type of Loan : Restructured Corporate Loans with Put Options
- Major Investors: Norinchukin Bank ( Asian )
Nomura Principal Finance ( European )
Western Asset Management ( American )
The next page shows the largest Korean international asset-backed securities transaction that KAMCO has completed. Also, the second largest asset-backed securities transaction that’s been completed out of non-Japan Asia.
The transaction in brief was USD 367 million of notes that were sold globally.
This transaction was jointly lead by Deutsche Bank and UBS Warburg.
The securitized assets were restructured corporate loans as you might imagine coming from KAMCO.
All of the loans were puttable back to the original banks that sold the loans to KAMCO.

15. Joint Venture AMC Joint Venture AMCs 1st AMC JV-AMC 2nd,3rd AMC JV-AMC
Bid Date
Dec 21, 1999
Face Value
KRW 484 billion
JV-AMC
Deutsche Bank
& Samsung Life
Insurance
KAMCO
2nd,3rd AMC
Bid Date
May 9, 2000
Face Value
KRW 978 billion
JV-AMC
Morgan Stanley
& GE Capital
KAMCO
4th AMC
Bid Date
June 20, 2001
Face Value
KRW 531 billion
JV-AMC
Asset Management Companies are formed by KAMCO, with 50 to 50 equity partnership from both KAMCO and the investor.
As you see in the slide, three joint venture asset management companies have been formed. The partners are Deutsche Bank, Samsung Life Insurance, and Morgan Stanley.
Aggregated loan amount of USD 2.0 billion has been sold off to these joint asset management companies.
Colony
Capital
KAMCO

16. Joint Venture CRC Joint Venture CRCs 1st CRC KAMCO LB INVESTORS INC
Bid Date
May 23, 2000
Face Value
USD 488 million
Lehman
Brothers
KAMCO
2nd CRC
Bid Date
Sept 27, 2000
Face Value
USD million
KAMCO SG INVESTORS INC
Colony
Capital
KAMCO
3rd CRC
Bid Date
Sept 27, 2000
Face Value
USD 124 million
KAMCO MS INVESTORS INC
JV CRC structure is shown on this page.
A CRC is set up with equity partnership of 50% each between KAMCO and investors.
KAMCO has funded the CRCs with loan from Asia Development bank of five million USD.
The investor holds the managerial right of the CRC through the fund management company.
However, investment strategies are made under an agreement between KAMCO and the investor.
Morgan
Stanley
KAMCO
(USD 1 = KRW 1,250)

17. Joint Venture CRV Joint Venture CRV 1st CRV First CRV Hyundai Capital
Bid Date
Aug 21, 2001
Face Value
USD million
(USD 1 = KRW 1,250)
Hyundai
Capital
KAMCO
First CRV

18. Individual Corp. Loan Sales - Methods
Methods of Sales
Investor takes over the managerial right
of the company by revising the reorganization plans
M&A
New Core Co.,Ltd, The Korea Express Co.,Ltd
Ssangbangwool Development Co.,Ltd
WooBang Co.,Ltd
Investor takes over KAMCO’s position
Loan Sale
KIA Electronics Co.,Ltd, Debec Construction,
Kumkang Trading co.,Ltd, Seoul Cast-Iron Corp.
Sungwon Construction Corp.

19. Daewoo Loans - Acquisition
■ KAMCO Has Acquired Daewoo Loans from 14 Daewoo Affiliates
(USD 1 = KRW 1,250)
(As of October 31, 2002 in billion U.S. Dollars)
Loan Type
Face Value (a)
Purchase Price (b)
Ratio (b/a,%)
Total
25.87
10.17
39.33
■ Of the USD bn of Daewoo Loans Acquired, KAMCO Has
Resolved USD 1.95 bn as of October 31, 2002
(USD 1 = KRW 1,250)
(As of October 31, 2002 in billion U.S. Dollars)
Acquisition
Resolution
25.87
CRV
0.41
Payment by Schedule
1.54
Work-out
0.00
Total
1.95

20. Resolution Strategies Spin-Offs (Divestitures, Split-Ups)
Daewoo Loans - Resolution Strategies
Resolution Strategies for Each of Daewoo Affiliates
Resolution Strategies
Companies
Sell After Work-out
Daewoo Shipbuilding & Marine Engineering Co.,Ltd.
Daewoo Heavy Industries & Machinery Ltd.
Daewoo Engineering & Construction Co., Ltd.
Daewoo International Co., Ltd.
Kyung Nam Enterprises Ltd.
Immediate Sales
Daewoo Motors
Ssangyong Motor
Daewoo Motor Sales
Daewoo Electronics Components Co., Ltd.
Spin-Offs (Divestitures, Split-Ups)
Daewoo Electronics
Daewoo Telecom Co.,Ltd
CRV
Orion Electronics
Daewoo Capital Co., Ltd.

21. Insolvency Law Reform related to Corporate Reorganization (Draft)
PART Ⅱ
Insolvency Law Reform related to Corporate Reorganization (Draft)

22. Integration of Three Insolvency Laws
■ Currently existing Three Laws related to Insolvency,
 Company Reorganization Act
 Composition Act
 Bankruptcy Act
■ New Insolvency Law to be effective early 2003
 Abolish composition proceedings
 Integrate company reorganization proceedings with the
bankruptcy proceedings after adding some improvements.

23. Debtor In Possession  Debtor responsible for financial distress
■ Basically, the former CEO will maintain managerial power as a Receiver appointed by the Court
■ Whereas Managerial power will be given to the third person as a Receiver for following cases
 Debtor responsible for financial distress
 The volume of Debt is notably higher than that of asset
 Reasonable request from creditors’ conference
 Rehabilitation of debtor company is necessary

24. Reinforcement of The Role of Creditors’ Conference
■ Mandatory formation of the creditors’ conference
■ Power of the creditors’ conference
- Present opinions on the appointment of the auditor
- May request due diligence on the company’s operation and management after the approval of the reorganization program
- May request appointment of the third person as a receiver

25. Comprehensive Suspension
■ Under the existing Law, “Corporate Reorganization Act”
a debtor has to apply for suspension of any individual compulsory execution, upon application of commencement of corporate reorganization proceedings, in case a creditor exercises foreclosure or compulsory execution
■ According to the New Insolvency Law, The Court may order comprehensive suspension to the debtor’s asset