Seoul: The state-run Korea Asset Management Corp. (KAMCO) is contemplating raising 140 billion won (US$95.3 million) to aid the normalization and restructuring of struggling companies, as reported by industry sources on Monday.

According to Yonhap News Agency, KAMCO has been reviewing a plan to amass a total of 50 billion won specifically to support companies undergoing corporate rehabilitation processes. Additionally, the agency is considering an investment of around 91.1 billion won in a policy fund aimed at assisting companies in the midst of restructuring. This plan is anticipated to be submitted to the Financial Services Commission on Tuesday.

The initiative comes in response to an increase in companies showing signs of financial distress, largely due to the rising borrowing rates. In November, the average lending rate of major banks in South Korea rose for the third consecutive month. The COFIX, or Cost of Funds Index, which serves as a benchmark lending rate for mortgage loans, climbed to 2.81 percent.

Corporate rehabilitation applications submitted to the court reached 1,196 over the January-November period last year, marking a 21.5 percent increase from the previous year, as per the Seoul Bankruptcy Court. Additionally, the number of bankruptcy filings in November exceeded 2,000, surpassing the previous record of 1,940.