S. Korean banks to launch corporate restructuring on 65 troubled companies

18:39, June 25, 2010      

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South Korean banks on Friday announced the list of 65 ailing companies to be put under a corporate restructuring program as they are on the verge of falling into potential defaults.

According to six local creditor banks, the lenders have put 45 troubled large companies, 16 construction firms, three shipbuilders and one shipper on the revamp list of candidates.

Although the lenders did not disclose the names of the companies, the financial watchdog revealed that 16 companies are listed on the country's main stock market, Lee Hae-sun, official at the Financial Service Commission (FSC), said in a briefing.

The FSC has been assessing credit risks of 1,985 companies with bank loans standing over the 50 billion-won (41.1 million-U.S. dollar) mark since May.

The move comes amid continued calls to accelerate corporate restructuring as a further delay could deteriorate the economy which has been on a recovery pace.

With the corporate revamp taking effect, local financial firms will likely set aside around 3 trillion won (2.5 billion U.S. dollars) in loan-loss reserves in order to absorb potential losses, the Financial Supervisory Service (FSS) said.

Source: Xinhua


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