UPDATE 4-Lehman seeking overseas capital, eyes Korea-WSJ
(Updates share reaction, adds basis point spread change)
SEOUL, June 4 (Reuters) - Lehman Brothers Holdings Inc LEH.N is looking to raise capital overseas and has approached at least one investor in South Korea, The Wall Street Journal reported on Wednesday.
Lehman shares rose about 85 cents, or 2.8 percent, to $31.49 in morning trading on the New York Stock Exchange. Over the past three days, the stock has tumbled 17 percent, chopping nearly $4 billion of market value from the company.
According to the newspaper, options for Lehman in Korea include the state-run Korea Development Bank and Woori Financial Group (053000.KS).
Korean Investment Corp (KIC), a sovereign wealth fund that manages about $20 billion and is an investor in Merrill Lynch & Co MER.N, is unlikely to invest in Lehman, the newspaper said, citing a person familiar with the situation.
KIC declined to comment when contacted by Reuters, while Lehman officials in its New York, Tokyo and Seoul offices were not available for comment.
Two major South Korean investment agencies -- the National Pension Service and the Korea Asset Management Corp -- told Reuters they were not aware of any possible capital injection in the Wall Street bank.
An executive of state-owned Korea Development Bank (KDB) also said he had not heard about an investment plan in Lehman. KDB will have the chief of Lehman Brothers' local operations, Euoo Sung Min, as its new CEO soon.
Woori Finance Holdings, which runs the country's No. 3 bank, denied any involvement in a Lehman fund-raising. Min had been chief financial officer of Woori prior to his stint at Lehman.
Separately, Lehman said on Wednesday that the new head of its investment banking in South Korea, Sungwoo Park, would succeed Min. Park had led Credit Suisse's (CSGN.VX) Seoul branch.
Lehman ended Tuesday's session with a market capitalization just shy of $17 billion, a little over a third of its peak value of more than $45 billion reached in February 2007.
The cost of protecting Lehman Brother's debt with credit default swaps widened early Wednesday. Lehman's five-year credit default swaps widened by about 17 basis points to 275 basis points, or $275,000 a year for five years to protect $10 billion of debt, according to data from Phoenix Partners Group. (Reporting by Anupreeta Das in San Francisco, Tenzin Pema in Bangalore and Kim Yeon-hee in Seoul; Editing by Ken Wills and Maureen Bavdek)
