Three or four big business groups may be asked by their creditor banks to take voluntary balance sheet improvement measures, local reports said Thursday.
Korea’s large banks are currently reviewing the financial soundness of 39 big business groups, chosen late last year by the Financial Supervisory Service, and may push a financial rehab for three or four of them, the reports said.
Financial Supervisory Service headquarters (Yonhap)
“The check on the financial health of big business groups by creditor banks is expected to be concluded by the end of May,” Yonhap News Agency reported, citing an unnamed source at the financial regulator.
The examination is annual. Last year, 41 business groups underwent the review, which resulted in 11 agreements on balance sheet clean-up measures.
This year’s review may add up to four to those already in the territory.
A wave of corporate restructuring is sweeping Korea’s shipping and shipbuilding industries, with STX Offshore & Shipbuilding, once the world’s fourth-largest shipyard, seen on track for a court receivership filing at the end of this month. Daewoo Shipbuilding & Marine Engineering, the world’s second largest, is struggling to restructure piles of debt.
Separate to the ongoing bank-led credit analysis, the FSS is conducting its own examination of big business groups to weed out nonviable firms. It hopes to complete the review of big firms by July and smaller ones by October.
By Lee Sun-young (milaya@heraldcorp.com)