Three Principal Companies Marked Symptom of Insolvency

Among the principal companies with a loan over 50 billion won, three companies were classified as `a company with a symptom of insolvency` or `a company with a possibility of insolvency symptom` under the corporate restructuring promotion law, following Hynix Semiconductor Co., Hyundai Petrochemical Co. and Ssang Yong Cement Industrial Co..

Jeong Jung-Soon, Director of Credit Supervision Dept. of the Financial Supervisory Service (FSS), said yesterday that ``the creditors saw, that three companies that loaned over 50 billion won had a symptom of insolvency according to the corporate restructuring promotion law. The creditors will decide the future direction to deal with these companies.`` However, Director Jeong said that the FSS could not reveal the name of the companies before the decision of the creditors.

The FSS told that the fourth liquidation examination on the corporates included 25 companies in the liquidation list such as disposal, M & A, and bankruptcy. Among 25 companies, 8 listed companies were included, but they were all issued for administration.

The FSS said, ``Among the 1097 companies that the creditors selected to examine, the four-time examinations put 141 companies including 13 listed companies on the liquidation list.`` The examiners evaluated that 398 companies are structurally short of operation funds.

Director Jeong gave more detailed explanation that among 25 companies on the liquidation list, only 20 companies are the actual objects of liquidation, except Haitai Confectionary Co. that completed its disposal, two companies that were determined to launch the court receivership, Samsung Motor on the process of liquidation, and a company that received a notice of dishonor.

And Director Jeong added that the FSS excluded Woobang Co. from the examination because it has been establishing the liquidation plan based on the actual examination result on its assets and debts.

According to the FSS, the 116 companies, that were put on the liquidation list until the third examination, have been under the liquidation process as follows; ▲completion of liquidation (21 companies), ▲ application for the cancellation of the court receivership and the composition (10 companies), ▲ being on the auction of collateralized securities (37 companies), ▲ the pursuit of M&A (10 companies), and ▲ others (38 companies).

The FSS plans to continue the liquidation examination every third month after selecting the objects of examination for the second half of this year until the end of this month.

Kim Seung-Ryun srkim@donga.com