The Financial Supervisory Service and creditor banks assessed the credit risks of 602 South Korean corporations, each having a loan of at least 50 billion won, and selected 32 of them as restructuring targets of this year. The number fell by two compared to the result of the regular assessment conducted last year. This is because 19 others have already been selected through the additional assessment in December last year.
13 out of the 32 received a C grade for corporate workout while the rest received D for receivership. 17 out of the 32 are shipbuilders, builders, shipping companies, steelmakers and petrochemical companies. The number of restructuring targets in the electronics industry exceeded four for the second consecutive year due to the poor conditions of partner firms such as electronic component suppliers.
Seven out of the 32 are listed or delisted companies, which are divided into two shipping firms, two shipbuilders, two electronics companies and one construction company. The number of the delisted is one and one-third of the rest are currently subject to stock trading ban.
The Financial Supervisory Service explained that Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, which are the three largest South Korean shipbuilders, were not selected as restructuring targets at this time in view of their self-rescue plans worth a total of 10 trillion won or so. It added that Hanjin Shipping, which has ongoing financing problems, is one of the 32.
The number of targets increased in the shipbuilding and shipping sectors but decreased in steelmaking and construction. It has been found that South Korean builders boosted the value of their contracts by approximately 48% last year based on a recovery of the domestic housing market.