ID :
44728
Sun, 02/08/2009 - 19:32
Auther :
Shortlink :
https://www.oananews.org//node/44728
The shortlink copeid
Corporate restructuring fund to set sail in March
SEOUL, Feb. 8 (Yonhap) -- The government plans to launch a special fund as early
as March to facilitate the restructuring of companies suffering from temporary
credit crunches or showing signs of financial trouble, officials said Sunday.
The move comes as a growing number of local companies are experiencing cash-flow
problems amid the global economic downturn that has dealt a harsh blow to the
export-driven South Korean economy.
According to the officials, the government and the state-run Korea Development
Bank plan to establish a roughly 100 billion won (US$73 million) corporate
restructuring fund in late March to fast-track the revamp of nonviable firms.
The government will seek to raise the size of the fund into the trillions by
encouraging institutional and retail investors to chip in, they said.
"The government will weed out nonviable firms as fast as possible and actively
provide support to companies deemed able to turn around with the help of creditor
institutions," a government official said on condition of anonymity.
The fund will take over companies that are hard pressed for cash or placed under
a debt rescheduling program, put them back on track, sell them off after two to
three years and return profits to investors, he said.
South Korean companies, especially construction companies and shipbuilders, have
been feeling the pinch of the sharp economic downturn.
In late January, local banks and nonbank financial institutions decided to end
support to two ailing companies and reschedule debts at 14 others to keep
potential defaults from jolting the slowing economy.
Since late December, the nation's financial watchdog has called on local lenders
to accelerate the process of singling out unhealthy construction firms and
shipbuilders as part of efforts to prevent a chain reaction of bankruptcies from
placing a further burden the economy.
Battered by tumbling exports, Asia's fourth-largest economy is widely expected to
post negative growth this year, compared with a 2.5 percent expansion last year.
(END)
as March to facilitate the restructuring of companies suffering from temporary
credit crunches or showing signs of financial trouble, officials said Sunday.
The move comes as a growing number of local companies are experiencing cash-flow
problems amid the global economic downturn that has dealt a harsh blow to the
export-driven South Korean economy.
According to the officials, the government and the state-run Korea Development
Bank plan to establish a roughly 100 billion won (US$73 million) corporate
restructuring fund in late March to fast-track the revamp of nonviable firms.
The government will seek to raise the size of the fund into the trillions by
encouraging institutional and retail investors to chip in, they said.
"The government will weed out nonviable firms as fast as possible and actively
provide support to companies deemed able to turn around with the help of creditor
institutions," a government official said on condition of anonymity.
The fund will take over companies that are hard pressed for cash or placed under
a debt rescheduling program, put them back on track, sell them off after two to
three years and return profits to investors, he said.
South Korean companies, especially construction companies and shipbuilders, have
been feeling the pinch of the sharp economic downturn.
In late January, local banks and nonbank financial institutions decided to end
support to two ailing companies and reschedule debts at 14 others to keep
potential defaults from jolting the slowing economy.
Since late December, the nation's financial watchdog has called on local lenders
to accelerate the process of singling out unhealthy construction firms and
shipbuilders as part of efforts to prevent a chain reaction of bankruptcies from
placing a further burden the economy.
Battered by tumbling exports, Asia's fourth-largest economy is widely expected to
post negative growth this year, compared with a 2.5 percent expansion last year.
(END)
