Gov't to push restructuring next year
Deputy Prime Minister Yoo Il-ho speaks during a ministers’ meeting at the Government Complex near Gwanghwamun, Seoul, Monday, on enhancing industrial competitiveness. / Yonhap
Shipbuilding, shipping, steel, petrochemicals face overhaul
By Park Hyong-ki
Finance Minister Yoo Il-ho said Monday that the government will continue to actively pursue corporate restructuring next year.
“We will keep this momentum in restructuring going next year as we look to the future,” Yoo said in an economic-related ministerial meeting in Seoul, Monday.
The minister added that the government will further map out the corporate restructuring plan for four industries most sensitive to the current economic slowdown — shipbuilding, shipping, steel and petrochemicals — in 2017.
The government will also remain vigilant over possible fallout in other related industries such as construction, and be ready to preemptively counter risks with a set of measures.
“We will implement a system that can regularly monitor and restructure related industries after assessing their credit risks,” Yoo said.
The government will aggressively pursue this with a plan enforcing an effective debt workout and self-rehabilitation measures as it did when it was dealing with Daewoo Shipbuilding & Marine Engineering and Hyundai Merchant Marine.
Korea announced the so-called “three-track” system of corporate restructuring earlier this year.
Under the scheme, financial authorities in collaboration with other state agencies and creditor banks have been identifying companies suffering from the industry slowdown; companies showing signs of default on their debt; and those with overcapacity.
A slew of companies ranging from shipping, shipbuilding to petrochemicals and steel — once Korea’s growth engines — exposed to financial risks stemming from downturns and bad debts face rigorous restructuring spearheaded by financial regulators.
Yoo told the press after the meeting that the government will decide whether to execute extra spending after evaluating the country’s growth and other key economic data in the first quarter of next year.
“This does not mean that we will absolutely consider devising a supplementary budget in February next year,” Yoo told reporters.
Last week, the government and ruling Saenuri Party indicated in a National Assembly meeting that it could devise the extra budget as early as February next year, should the country’s growth be projected at lower than 2.5 percent.
They also noted that the government could seek to frontload nearly 70 percent of its budget in the first half of 2017 to spur jobs and the economy.
The Bank of Korea (BOK) recently called on the Finance Ministry to spend more next year, as the central bank has used all of its available resources, including rate cuts and bank recapitalization, for the economy.