Creditors to review overall health of large business groups

SEOUL, March 15 (Yonhap) -- South Korean creditors are to begin reviewing the overall health of 44 large businesses burdened with sizable debt to determine what support measures can be taken, government sources Sunday.

The Financial Services Commission (FSC) and a number of commercial banks said
they will start checking the companies' performances and balance sheets this week
to get a clearer picture of their credit risks.
Based on those assessments, the government plans to inject bailout funds starting
in May to buy bad assets belonging to those firms and facilitate restructuring.
The commission said banks in charge of the evaluation will focus on debt ratios,
ability to pay interest on outstanding loans and operating profit levels.
The review will be conducted until late April. Companies exposed to high levels
of risk will be required to sell off assets and affiliates to cover losses.
Banks will also take steps to check the business conditions of 37 shipping
companies that have debt in excess of 50 billion won (US$33.7 million), according
to the FSC. They will determine which of these companies must undergo
restructuring programs by early May.
The shipping sector has been hard-hit by the global economic slump, which has
sapped demand for freight and cargo.
The government, meanwhile, said it will ask lawmakers help facilitate the
creation of a 40-trillion-won special corporate restructuring fund next month
through the issuing of state obligation bonds.
The money is to be used to buy up bad loans, real estate and corporate bonds. If
the proposal passes the National Assembly, the fund will be made available from
May.
yonngong@yna.co.kr
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