Debt-laden companies will benefit from new IFC fund<\/p>\n
WASHINGTON (Reuters): The World Bank's private sector arm
\nplans to set up a new Asian equities fund to restructure debt-
\nladen corporations caught up in the region's financial turmoil,
\nofficials said on Thursday.<\/p>\n
The fund, expected to raise up to $1 billion in private
\ncapital, would invest in hundreds of companies in the hardest-hit
\neconomies, including Indonesia, South Korea and Thailand, the
\nInternational Finance Corporation said.<\/p>\n
The fund would be part of a $10 billion initiative, announced
\nthis week with few details by the United States and Japan to help
\nbanks and companies to restructure.<\/p>\n
The world's richest nations hope the new initiative will help
\nease the global financial crisis, which started in Asia a year-
\nand-a-half ago, and spread to Russia and Latin America.<\/p>\n
So far, the International Monetary Fund, the World Bank and
\nother global lenders have pledged more than $180 billion in major
\nbailouts for Indonesia, South Korea and Thailand, Russia and
\nBrazil.<\/p>\n
Javed Hamid, the IFC's director for East Asia and the Pacific
\nregion, said the newly-proposed equities fund aimed to bring wary
\ninvestors back to Asian markets and help companies raise capital
\nin a tight credit environment to pay off their debts and fund
\nother operations.<\/p>\n
\"It'll make a major statement that investors are returning,
\ncompanies are restructuring and things are going to start looking
\nup,\" Hamid said in an interview.<\/p>\n
The IFC-backed equities fund would target soundly-managed
\nAsian corporations, providing them with cash to restructure their
\ndebts and fund other operations.<\/p>\n
Hamid said the new fund should be up-and-running early next
\nyear, with start-up capital from the IFC and other multilateral
\nlenders. An investment firm would run the fund's day-to-day
\noperations. The IFC, which helps finance private sector projects
\nin developing countries, has already approached firms in the
\nUnited States and Asia about managing the fund. It has also
\ncommitted to bringing in international investors.<\/p>",
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