Recipients Likely to Include Korean Air, Asiana Airlines, HMM
The South Korean government’s 40 trillion won key industry stabilization fund is scheduled to be put into operation next month. Its potential beneficiaries are companies in the aviation industry, the shipping industry and industries to be designated by the Financial Services Commission that have been stricken by COVID-19, have total borrowings of at least 500 billion won each, and have at least 300 employees each.
According to industry sources, the fund is likely to go to Korean Air, Asiana Airlines, Jeju Air and T’way Air. The South Korean government already decided to provide 1.2 trillion won and 1.7 trillion won for Korean Air and Asiana Airlines, respectively. However, the airlines still need more assistance as they are hit hardest by the COVID-19 pandemic.
In the shipping industry, the government’s assistance reached 1.6 trillion won after the outbreak of COVID-19 and recent oil price plunges. However, the sector is in need of more assistance and there may be talks for HMM, Pan Ocean, Korea Line and SK Shipping.
In the automobile industry, SsangYong Motor Co. is likely to make a request while working out its own salvation. Samjong KPMG recently expressed a disclaimer of opinion on SsangYong, but the automaker is trying to recover itself by disposing of assets and freezing wages.