Financial regulator urges petrochem sector to draw up restructuring plans

Financial Services Commission (FSC) Vice Chairman Kwon Dae-young / Yonhap

The financial regulator said Tuesday the ailing petrochemical sector should draw up restructuring measures, including an output cut, in exchange for financial support.

Kwon Dae-young, vice chairman of the Financial Services Commission (FSC), said petrochemical companies have not shown sincere, concrete restructuring plans so far, adding there would be no financial support if they do not offer detailed action plans.

Earlier in the day, 17 banks and state-run policy lenders agreed to provide financial support, including a cut in lending rates, extension of loan maturities and fresh loans, in exchange for the sector's voluntary restructuring measures.

The local petrochemical sector has been facing a prolonged oversupply leading to low prices, especially amid the economic slowdown.

The government wants local businesses in the sector to sharply cut their output and streamline their business portfolio.