Combined debt of S. Korean conglomerates grows in 2008

SEOUL, April 29 (Yonhap) -- The combined debt of South Korea's leading
conglomerates surged in 2008 as they rushed to secure funds by increasing
borrowing to weather a worsening economic downturn, a government report showed
Wednesday.

The total debt of 48 groups subject to restrictions on intra-group equity
investment amounted to 691.9 trillion won (US$511.4 billion) at the end of last
year, up 38 percent from a year earlier, according to the report by the Fair
Trade Commission.
The conglomerates include Samsung, state-run Korea Electric Power Corp., Hyundai
Motor, SK, LG and steelmaker POSCO. The firms are prohibited from making
cross-investments between their subsidiaries, a government ban imposed to stem
unfair competition by conglomerates with assets exceeding 2 trillion won.
The report was based on financial data provided by each group.
The increased debt for the conglomerates, known as chaebol, was attributed to a
rise in borrowing or debt sales last year aimed at securing liquidity and
operating funds amid heightened uncertainty over economic and business
conditions.
Another contributing factor was a weaker won, which drove up the local currency
value of their foreign debts, the report explained.
Rising debts also sent the groups' average debt-to-equity ratio higher, up 119.9
percent last year from 98.4 percent a year earlier, according to the report.
kokobj@yna.co.kr
(END)