Two Track Strategy
The Moon Jae-in government is working on a new way of corporate restructuring. The restructuring is likely to be led by private sector participants such as private equity funds (PEFs) in most cases, but by the government itself in the case of large corporations that have a significant impact on the national economy.
Kim Jin-pyo, head of a Presidential advisory panel, said on May 25 that the previous administration’s constant corporate restructuring led by the Financial Services Commission (FSC) and creditor banks did not go well as seen in the case of Hanjin Shipping, Daewoo Shipbuilding & Marine Engineering, etc.
According to the panel, the preparation of the new restructuring method began during the election campaign period and is in its final stage now.
Under the circumstances, much attention is being paid to details of the Moon Jae-in government’s plan. The FSC recently announced that it would veer towards market-friendly restructuring led by the private sector, examples of which include PEFs acquiring non-performing loans from banks. However, this is likely to be limited in size and large-scale restructuring is likely to be covered by the public sector.