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Lone Star to make S Korea regional hub

US investment firm Lone Star has chosen South Korea to be the hub of its Asian operations, the company said in a statement yesterday, just days after it acquired a major South Korean bank.

The Texas-based firm said its Korean office would oversee all of its decisions for investments in Asia, except Japan, and manage its personnel in the region.

The South Korean government last week approved the sale of a controlling 51 percent stake in Korea Exchange Bank (KEB) to Lone Star, marking the largest-ever foreign investment in South Korea's financial sector, worth 1.4 trillion won (US$1.2 billion).

Lone Star became the second foreign fund to take over a South Korean bank, after US fund Newbridge Capital acquired Korea First Bank in 2001.

The US fund said its Seoul office would play a central role in administering computer systems and receive accounting-related reports from its offices in other Asian countries.

It also vowed to take "proactive measures" for KEB, South Korea's sixth-largest commercial bank with assets estimated at 55.8 trillion won.

KEB welcomed the deal, saying the injection of fresh capital would help it reduce bad loans to ailing firms and household borrowers.

KEB suffered a net loss of 146 billion won in the first half of this year.
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