Government Preparing Package for Airlines
With the Mahindra Group having canceled its 230 billion won investment in SsangYong Motor Co., the Financial Services Commission (FSC) said on April 6 that creditors, shareholders, employees and employers will seek a solution by joining forces.
According to the FSC, the Mahindra Group recently announced that it would invest 40 billion won and attract new investors, the automaker expressed its strong will to normalize itself, and creditors are expected to have discussions on how they can contribute to the efforts of the company.
When it comes to the South Korean government’s financial support for airlines, the FSC stressed that the government is well aware of the seriousness of the situation and the support for airlines will require comprehensive measures such as business improvement and recapitalization in that airlines by nature have high debt ratios. This implies that the government will provide the financial support on condition that they first try to make things better.
As of the end of last year, the debt ratios of Korean Air and Asiana Airlines were 871.5 percent and 1,386.7 percent, respectively. The FSC mentioned that it is monitoring the industry with relevant ministries and government-run financial institutions and an announcement will be made once a conclusion is reached.