Posted May. 01, 2009 07:23,
Creditor banks said yesterday that some 400 of 1,422 large companies with financial problems will undergo restructuring.
The lenders plan to conduct further scrutiny of the 400 companies finances until the end of June before putting those showing signs of insolvency under debt workout or liquidation.
President Lee Myung-bak also urged stringent restructuring for big businesses, saying certain companies might think they can avoid restructuring if they hang on a bit longer.
At an emergency economic meeting yesterday, his administration made a report to the president on a corporate restructuring plan involving credit risk assessments for the 400 companies.
Under the plan, companies showing signs of insolvency will be put under debt workout, while those with a slim chance of recovery will face liquidation.
Smaller companies with debts of less than 50 billion won (39 million U.S. dollars) will also be selected for restructuring after assessments. Corporate restructuring has been limited to certain industries such as construction, shipbuilding and maritime transportation, but will be expanded all industries.
Creditors will also seek agreements with 11 conglomerates to improve their debt structures by the end of next month. Fourteen business groups got failing grades in an assessment of their financial structures.
The government plans to have bank executives take care of corporate restructuring in person and punish bankers whose restructuring performances fail to meet a certain standard.
President Lee urged the banks to restructure marginal companies quickly so that healthier enterprises can survive, calling for a more aggressive attitude by bankers.