Korean Capital Buys AIG Headquarters in NY

A consortium led by Kumho Investment Bank has taken over the American International Group (AIG) headquarters building (photo) in New York, the first time for a Korean investor to buy a large building on Wall Street.

Kumho said yesterday that it will form a consortium with other institutional investors at home and abroad and take over the AIG headquarters and annex buildings.

“In the international bidding hosted by multinational real estate investment consulting firm CBRE, we won the AIG building along with YWA,” a Kumho source said. “We signed the main contract June 2 and will pay by forming a consortium with large Korean financial institutions and pension funds.”

“We are negotiating with institutional investors on the final conditions and also asking foreign investors for participation. Kumho Investment Bank will gather investors and help them purchase the building, and Korean institutional investors will invest in most of the shares.”

The financial sector says Kumho will collect 200 million U.S. dollars from investors and get a loan for the rest using the AIG headquarters as collateral.

AIG, which was bailed out by the U.S. government, put up its holding company’s building for sale to secure cash.

Kumho said, “We cannot disclose the exact purchase price according to the contract with AIG. It is reasonable reflecting the current price and future prospects.”

Before the crisis, the building cost more than 300 million dollars.

Located on 70 Pine Street in Manhattan, the AIG headquarters has 66 floors and covers 90,000 square meters. Built in 1932, it the fifth highest building in New York, connected to a 19-floor annex on 72 Wall Street.

Kumho`s largest shareholder with assets of 1.7 trillion won (1.36 billion dollars) is Woori Private Equity Fund of the Woori Financial Group, which owns 41.4 percent. Asiana Airlines owns 16.7 percent.

imsoo@donga.com