Companies with High Debt Ratio Face Restrictions on Borrowing

Companies whose debt to equity ratio is higher than the industry average cannot borrow short-term(less than one-year due) money from foreign sources, despite the government's first round of foreign trade liberalization beginning on April 1.
Companies whose credit rating by the Korean credit rating agencies is equal to or less than a B grade will be restricted from borrowing short-term foreign money.
The Ministry of Finance and Economy (MOFE) announced on March 26 that it will implement the first stage of its foreign exchange trade liberalization plan on April 1 which will include these regulations.
Companies that will be effected include Korea Aluminium Ltd., Hyundai's Korea Industrial Development, Daewoo Telecom and Daewoo Precision, and LG Metals Corporation. These companies will not be able to borrow short-term foreign money.
In another f/x regulation, shopowners who possess a counterfeit-bill detector will be allowed to operate a foreign exchange service once they register with the government. But, the government will only approve exchanging foreign money into won; the exchange of won into foreign money will be restricted until the end of 2000.

Hyeong Ki Kim : myriad@joongang.co.kr