ID :
49200
Thu, 03/05/2009 - 16:39
Auther :
Shortlink :
https://www.oananews.org//node/49200
The shortlink copeid
S. Korean banks to accelerate restructuring of shippers
(ATTN: RECASTS headline, lead; UPDATES with more quotes and details throughout)
SEOUL, March 5 (Yonhap) -- South Korea's financial watchdog said Thursday local
banks will assess the health of ailing shipping lines by early May in a bid to
keep potential defaults from rattling the slumping economy.
Local shippers, accustomed to a business boom due to rising shipping rates and
high demand, have been feeling the pinch of the global financial crisis and the
slumping economy, with some facing a severe liquidity squeeze.
Experts have warned that a possible bankruptcy chain reaction will undermine the
soundness of the shipbuilding and banking sectors, dealing a harsh blow to the
whole economy.
"The watchdog plans to advise creditor banks to complete their reviews of the
credit risks of ailing shippers by early May to accelerate the restructuring
drive," Kwon Hyouk-se, secretary general at the Financial Services Commission
(FSC), told a press conference.
According to the watchdog, out of 177 shipping lines, 37 companies whose debt to
the banking sector surpasses 50 billion won (US$32.1 million) will be under the
first review. Local shippers owed a combined 16 trillion won to the local
financial sector.
The government also plans to craft policy measures to give support to the
shipping industry, such as purchasing idle ships and tax benefits, it added.
The country is seeking to create a fund to be used to buy extra ships in a bid to
accelerate their sales and prevent them from being sold at discount prices.
"The state-run Korea Development Bank or state debt clearer Korea Asset
Management Corp. could join the fund. The watchdog is weighing such plans," Kwon
added.
The move comes as local banks have become increasingly reluctant to lend,
especially to smaller, cash-strapped firms, due to fears that a deepening
economic slump may result in more bad loans, compromising their financial
soundness.
South Korea has stepped up its process of weeding out troubled companies. In
mid-January, local banks decided to end support to two ailing companies and
reschedule debts at 11 builders and three shipbuilders. They are in the process
of singling out more troubled construction firms and shipbuilders.
sooyeon@yna.co.kr
(END)
SEOUL, March 5 (Yonhap) -- South Korea's financial watchdog said Thursday local
banks will assess the health of ailing shipping lines by early May in a bid to
keep potential defaults from rattling the slumping economy.
Local shippers, accustomed to a business boom due to rising shipping rates and
high demand, have been feeling the pinch of the global financial crisis and the
slumping economy, with some facing a severe liquidity squeeze.
Experts have warned that a possible bankruptcy chain reaction will undermine the
soundness of the shipbuilding and banking sectors, dealing a harsh blow to the
whole economy.
"The watchdog plans to advise creditor banks to complete their reviews of the
credit risks of ailing shippers by early May to accelerate the restructuring
drive," Kwon Hyouk-se, secretary general at the Financial Services Commission
(FSC), told a press conference.
According to the watchdog, out of 177 shipping lines, 37 companies whose debt to
the banking sector surpasses 50 billion won (US$32.1 million) will be under the
first review. Local shippers owed a combined 16 trillion won to the local
financial sector.
The government also plans to craft policy measures to give support to the
shipping industry, such as purchasing idle ships and tax benefits, it added.
The country is seeking to create a fund to be used to buy extra ships in a bid to
accelerate their sales and prevent them from being sold at discount prices.
"The state-run Korea Development Bank or state debt clearer Korea Asset
Management Corp. could join the fund. The watchdog is weighing such plans," Kwon
added.
The move comes as local banks have become increasingly reluctant to lend,
especially to smaller, cash-strapped firms, due to fears that a deepening
economic slump may result in more bad loans, compromising their financial
soundness.
South Korea has stepped up its process of weeding out troubled companies. In
mid-January, local banks decided to end support to two ailing companies and
reschedule debts at 11 builders and three shipbuilders. They are in the process
of singling out more troubled construction firms and shipbuilders.
sooyeon@yna.co.kr
(END)
