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Five to six big conglomerates subject to exit review

Posted October. 04, 2000 20:29,   


Five to six big conglomerates among the top 60 nationwide will be subject to an intensive review to determine whether they will be revived or liquidated.

Firms with low asset adequacy, known otherwise as forwarding-looking criteria (FLC), which obtained more than 50 billion won in loans and are unable to pay even interest with their profits, will be liquidated, according to financial sources Wednesday.

The Financial Supervisory Commission (FSC) said it will announce the guidelines for determining the viability of the enterprises in order to determine which corporations will be liquidated Thursday morning.

A high-ranking FSC official said that five to six construction, shipping and cement firms whose viability is questioned by the market due to severe financial difficulties will be screened.

He said that these companies are operating normally outwardly, but are suffering from serious cash flow problems due to large debts. Some of them are under the debt workout program.

However, he said that all of these firms will inevitably be placed under the workout program or court receivership, or will be liquidated.

If their self-rescue efforts are recognized by the creditors and they are gaining overseas orders, attracting foreign funds or increasing capital, they may revive with new loans, debt-to-equity swaps or rescheduling, he explained.