ID :
45602
Sat, 02/14/2009 - 13:14
Auther :
Shortlink :
https://www.oananews.org//node/45602
The shortlink copeid
(LEAD) Gov't to sell state-invested companies to attract FDI
SEOUL, Feb. 13 (Yonhap) -- The government said Friday it will make a concerted effort to sell companies that received public funds to attract up to US$12.5 billion in foreign direct investment (FDI) this year.
The plan that was approved at a committee made up of government ministers,
provincial governors and mayors earlier in the day calls for detailed plans to
sell or hand over stakes in private companies that received bailout funds
following the 1997-98 Asian financial crisis, the Ministry of Knowledge Economy
said.
"The overall situation is not favorable for sale, but a blueprint is being drawn
to select companies that could attract FDI within the year," said Kim Dong-soo,
head of the ministry's business investment policy bureau.
Without going into details, he said blueprint and special task force teams to
manage sales negotiations will be set up within the month, although he made clear
that no specific company has been selected to be sold.
The government and local banks injected huge sums into 14 private companies,
including Hynix Semiconductor Inc., Daewoo Shipbuilding and Marine Engineering
Co. (DSME), Hyundai Engineering and Construction Co., Korea Aerospace Industries,
Ltd. (KAI) and Woori Bank.
Seoul may also consider selling its holdings in 33 state-run companies like Korea
District Heating Corp. and Korea Plant Service Engineering. The government said
last week it may "privatize" some corporations to streamline the public sector
that has been criticized for being inefficient.
The official said that while DSME and KAI cannot be sold outright to foreign
owners since they supply various arms to the country's military, they can own
stakes in the company.
DSME is one of the top three shipbuilders in the world, building warships and
submarines for the South Korean Navy. KAI has won contracts to build parts for
commercial aircraft, as well as developing the T-50 Golden Eagle supersonic jet
and KT-1 basic prop-trainer.
Industry sources have hinted that the shipbuilder could be sold if the
warship-making division separates from the company, while KAI could be used to
attract Arab investment.
The United Arab Emirates (UAE) has expressed interest in buying Golden Eagle jets
and want to increase its presence in the high-tech sector.
Related to attracting funds, Seoul said it is keen to get both Middle Eastern and
Chinese capitalists to invest in the country.
"Investors from these two regions have in the past maintained a conservative
posture in terms of FDI, so they probably have available resources at hand," said
Kim.
He said large sovereign funds operated by Kuwait, the UAE, Saudi Arabia and
Singapore are attractive and pointed out that the the government, in cooperation
with the Korea Trade-Investment Promotion Agency, plans to arrange at least 150
investor relation events and take part in large industrial fairs in foreign
countries.
In addition to these measures, the ministry in charge of the country's industrial
policies, trade promotion and investment said 44 investment projects on the
drawing board could bring in $7.7 billion.
The 44 investment projects are made up of four main parts, with Seoul formulating
different approaches for large multinationals, institutes that can contribute to
sustainable "green growth," and those that can contribute to balanced regional
development.
Efforts will be made to get businesses that have already invested to increase
their total since in the past, these types of investments make up roughly 45 of
all incoming funds.
"Due to the sensitive nature of such transactions, specifics cannot be announced
ahead of any formal deal, but there is some active interest in the Saemangeum
reclamation work taking place on the west coast and large-scale development for
the coastal regions," an official said on condition of anonymity.
He emphasized that while there may be skepticism about the country being able to
attract investment this year, the target is not impossible since a deal to sell a
large business could bring in billions of dollars.
The need to attract FDI has gained momentum since the worldwide economic slump
may cause the South Korean economy to contract 2 percent annually this year, with
up to 200,000 jobs being lost.
In 2008, FDI reached $11.7 billion, up from $10.5 billion in 2007 as the new Lee
Myung-bak administration engaged in aggressive policy initiatives, including a
three-year foreign business improvement plan to give greater incentives to
foreign businesses.
yonngong@yna.co.kr
(END)
The plan that was approved at a committee made up of government ministers,
provincial governors and mayors earlier in the day calls for detailed plans to
sell or hand over stakes in private companies that received bailout funds
following the 1997-98 Asian financial crisis, the Ministry of Knowledge Economy
said.
"The overall situation is not favorable for sale, but a blueprint is being drawn
to select companies that could attract FDI within the year," said Kim Dong-soo,
head of the ministry's business investment policy bureau.
Without going into details, he said blueprint and special task force teams to
manage sales negotiations will be set up within the month, although he made clear
that no specific company has been selected to be sold.
The government and local banks injected huge sums into 14 private companies,
including Hynix Semiconductor Inc., Daewoo Shipbuilding and Marine Engineering
Co. (DSME), Hyundai Engineering and Construction Co., Korea Aerospace Industries,
Ltd. (KAI) and Woori Bank.
Seoul may also consider selling its holdings in 33 state-run companies like Korea
District Heating Corp. and Korea Plant Service Engineering. The government said
last week it may "privatize" some corporations to streamline the public sector
that has been criticized for being inefficient.
The official said that while DSME and KAI cannot be sold outright to foreign
owners since they supply various arms to the country's military, they can own
stakes in the company.
DSME is one of the top three shipbuilders in the world, building warships and
submarines for the South Korean Navy. KAI has won contracts to build parts for
commercial aircraft, as well as developing the T-50 Golden Eagle supersonic jet
and KT-1 basic prop-trainer.
Industry sources have hinted that the shipbuilder could be sold if the
warship-making division separates from the company, while KAI could be used to
attract Arab investment.
The United Arab Emirates (UAE) has expressed interest in buying Golden Eagle jets
and want to increase its presence in the high-tech sector.
Related to attracting funds, Seoul said it is keen to get both Middle Eastern and
Chinese capitalists to invest in the country.
"Investors from these two regions have in the past maintained a conservative
posture in terms of FDI, so they probably have available resources at hand," said
Kim.
He said large sovereign funds operated by Kuwait, the UAE, Saudi Arabia and
Singapore are attractive and pointed out that the the government, in cooperation
with the Korea Trade-Investment Promotion Agency, plans to arrange at least 150
investor relation events and take part in large industrial fairs in foreign
countries.
In addition to these measures, the ministry in charge of the country's industrial
policies, trade promotion and investment said 44 investment projects on the
drawing board could bring in $7.7 billion.
The 44 investment projects are made up of four main parts, with Seoul formulating
different approaches for large multinationals, institutes that can contribute to
sustainable "green growth," and those that can contribute to balanced regional
development.
Efforts will be made to get businesses that have already invested to increase
their total since in the past, these types of investments make up roughly 45 of
all incoming funds.
"Due to the sensitive nature of such transactions, specifics cannot be announced
ahead of any formal deal, but there is some active interest in the Saemangeum
reclamation work taking place on the west coast and large-scale development for
the coastal regions," an official said on condition of anonymity.
He emphasized that while there may be skepticism about the country being able to
attract investment this year, the target is not impossible since a deal to sell a
large business could bring in billions of dollars.
The need to attract FDI has gained momentum since the worldwide economic slump
may cause the South Korean economy to contract 2 percent annually this year, with
up to 200,000 jobs being lost.
In 2008, FDI reached $11.7 billion, up from $10.5 billion in 2007 as the new Lee
Myung-bak administration engaged in aggressive policy initiatives, including a
three-year foreign business improvement plan to give greater incentives to
foreign businesses.
yonngong@yna.co.kr
(END)
