Restructuring Hurdles
The major business groups in financial structural reform agreement with creditors have to redeem debentures worth close to three trillion won combined within this year, which is equivalent to one month’s debenture issue by all domestically listed companies.
The Korea Securities Depository announced on May 14 that the 14 major corporations in the main debtor group, all of which are subject to the agreement, are supposed to redeem 2.8866 trillion won (US$2.8115 billion) before the end of this year.
At present, those in the group considered to be more vulnerable than the others are undergoing intensive, creditor-led restructuring in the financial structural reform agreement. Among them, Hanjin, Dongbu, Hyundai, Kumho Asiana, and STX were found on the list for two consecutive years.
The Hanjin Group has to redeem 1.03 trillion won (US$1.00 billion) worth of debentures within this year, which is divided into 770 billion won (US$750 million) from Korean Air, 210 billion won (US$204.5 million) from Hanjin Shipping, and 50 billion won (US$48.7 million) from the holding company Hanjin. The credit rating outlooks for the first and the third have become worse these days.
The amount reaches 330 billion won (US$321 million) for the Hyundai Group, which is proceeding with its own self-help plan, 290 billion won (US$282 million) for the Donbgu Group, and 320 billion won (US$311 million) for Kumho Asiana.
Of those that signed the agreement for the first time, Dongkuk Steel has to repay bonds worth 250 billion won (US$243.5 million), followed by Hyundai Development Company (230 billion won, US$224 million), Halla Group (180 billion won, US$175.3 million), Daewoo Engineering & Construction (150 billion won, US$146 million), and Daesung Group (100 billion won, US$97.4 million).