Every night he dreams of accomplishing business projects he has conceived. Many of the dreams have been and will be realized by him, Mr. Soo-Ryong Kim, Managing Director of Chase Manhattan Bank Seoul Branch.

Mr. Kim is one of the leading experts in project finance in the world. The number of project finance he has accomplished for Korean companies (excluding that for foreign companies) is countless, including Sunkyung’s oil refinery project at Shenzhen, China (US$1,600 million), Daewoo’s joint venture with Shell (US$300 million) and Hyundai’s automotive plant in Turkey. Last month he held a project finance seminar in great admiration in Seoul. He is a preacher as well as an expert in project finance.

Mr. Kim, an MBA graduate from the Wharton School of the University of Pennsylvania, began to take interest in project finance after he moved in 1979 from Korea Exchange Bank to Manufacturers Hanover Trust Co., a predecessor bank of Chemical Bank and Chase Manhattan Bank. After serving as Area Manager for Korea and Taiwan at Manufacturers Hanover Trust Co., he has continued to be in charge of project finance at Chemical Bank and Chase Manhattan Bank.

Mr. Kim explained the general concept of the project finance: “Given the government’s privatization plan for power plants, a great number of SOC projects and increasing entry into China by Korean companies, the number of candidates for project finance is significant. Knowledge and understanding of the project finance by Korean financial institutions, however, are not sufficient and some misconceptions must be revised. ‘Project finance’ represents ‘long term financing at low interest rates, without payment guarantee but based on profitability and cash generating ability of the project company’.” He added in detail, “Project finance includes all procedures involved in project feasibility study and mobilizing requisite funds at competitive terms. In other words, it includes advisory service at initial phase through forming syndications at final phase. Funding is only the work at the last phase.”

Project finance is not limited to the orders that project sponsors have initially placed; it is important to create demand or new contracts as well. There was Mr. Kim’s advisory and significant role behind Samsung’s entry into Hollywood early this year. “In advanced countries, media industries are vertically integrated in common. Samsung Group lacked in contents such as a motion picture company to form such vertical integration, though the Group had many media subsidiaries such as cable TV, entertainment amusement park, and newspaper companies. Thus, Samsung’s investment in New Regency Productions was initiated and succeeded,” Mr. Kim stated.

Techniques, as well as new contracts should be developed. “In 1980, Samsung Heavy Industries Co. received orders to build 16 ships from UK and Norway. While ship owners asked for deferred payment as a settlement method, K-Exim lacked money to build those ships. With K-Exim, I created “co-financing” method where foreign bank syndicate lent money to the shipbuilder under K-Exim’s payment guarantee,” Mr. Kim explained.

Mr. Kim has an avid interest in mergers and acquisitions (M & As) advisory as M & A is part of procedures for project finance. Of the projects he has accomplished to date, he is mostly impressed with the privatization of Entel, a government owned telecommunication company in Argentina, which was a US4,900 million project where more than 70 financial institutions and enterprises participated for debt-for-equity conversion syndication. He utilized a technique where non-performing loans were converted into equity shares. It took one year and six months for Mr. Kim to consummate the project in 1989-1991.

“In the early 1980s Korea was suffering from a very weak foreign exchange reserve position, affected by oil price hikes and civil revolution at Kwangju City. Given the unstable political situation, it was very difficult for the Korean government and enterprises to borrow money overseas. At home and abroad, I persuaded foreign banks into lending money to Korea. It was a great pleasure for me to have introduced offshore loans and eventually to contribute to the improvement of the nation’s balance of payment,” he said.

As a constant reminder to his success, exhibited in Mr. Kim’s office room are many glass plates in memory of five jumbo syndications, totaling US$3,000 million and including a US$700 million loan in 1980 and a US$500 million loan in 1982, for Korea Exchange Bank, who borrowed on behalf of the Korean government.