SEOUL, May 28 (Yonhap) — South Korea’s financial regulator on Thursday unveiled a plan to create a fund worth 300 billion won (US$242 million) as part of broader efforts to help facilitate corporate restructuring amid the economic fallout of the new coronavirus.

The fund is meant to extend loans to companies and buy their convertible bonds or bonds with warrants, the Financial Services Commission (FSC) said in a statement.

The commission said the creation of the fund could meet companies’ short-term capital needs, and investors can expect a stable profit with low risks, which could lead to additional investments.’

“Market-led restructuring is a must … as creditor banks have a limitation in their assistance to restructuring companies for the normalization of management,” Sohn Byung-doo, vice chairman of the commission, said in a meeting with officials of policy lenders and private equity funds at a building in southern Seoul.

The move comes as some South Korean companies are pushing to sell their assets to secure liquidity amid uncertainty over the COVID-19 pandemic.

The corporate restructuring innovation fund, set up in 2018, has so far invested about 700 billion won in 16 companies, including KG Dongbu Steel Co. and Sungdong Shipbuilding & Marine Engineering Co.

The commission has expanded the size of the corporate restructuring innovation fund to 2.6 trillion from the previous 1.6 trillion won.