Merrill Lynch & Co's (MER.N) talks to sell bad
loans to Korea Asset Management Corp (KAMCO) faced a deadlock
due to a disagreement over price, the South Korean state agency
said on Thursday.
Bloomberg reported earlier, citing KAMCO chief executive
Lee Chol-Hwi, that the sale was faltering over differences in
assessing the value of assets.
"We have been in talks with Merrill but couldn't narrow the
price gap," said a KAMCO spokesman, confirming Lee's comments.
"Now we'll drop the discussion so far and start a new round of
negotiations."
KAMCO declined to give size and other details about
Merrill's assets it seeks to buy.
The government debt clearer is also "keeping channels" with
other U.S. institutions to buy distressed assets, the spokesman
said, without elaborating.
Failure to strike a deal may indicate Merrill, which has
been battered by more than $50 billion of credit market losses,
and Lehman Brothers Holdings Inc (LEH.N) might have to cut
prices for assets they are trying to sell.
No-one at Merrill Lynch was immediately available for
comments.
Another South Korean state-controlled institution, Korea
Development Bank, is in talks with Lehman over a possible joint
investment with other Korean banks in the U.S. investment bank.
In July, Merrill agreed to sell $30.6 billion of
collateralized debt obligations, a kind of repackaged debt, to
an affiliate of private equity fund Lone Star Funds, for just
$6.7 billion, or about 22 cents on the dollar.
(Reporting by Rhee So-eui in Seoul and Saumyadeb
Chakrabarty in Bangalore; Editing by David Holmes and Louise
Heavens)
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