14 of 36 Firms Flunking Plans For Recovery, Creditors Say

Fourteen companies under workout plans will be reprimanded and warned by their creditors for poor performances and for failing in their restructuring efforts. The companies are among the nation's total of 36 companies under rescue schemes.

The creditors will warn 10 companies that received a grade of C or "fair" in their periodical performance evaluations, including Kohap Ltd., Daewoo Electronics Co., Saehan Industries Inc., Ssangyong Motor and Daewoo Heavy Industries & Machinery LTD. The creditors have also requested that the companies provide specifics on how they will update their rescue plans to make up for last year's unsatisfactory reorganization results.

Hanvit Bank asked Kohap to take a number of restructuring measures, such as dropping its chemical fiber production business.

Daewoo Telecom, Namsun Aluminum and Ssangyong Engineering and Construction Co. received even lower grades at D, or "poor," and Miju Steel Manufacturing Co. received E, or "inferior." The creditors can act to punish the managements of companies in the lower two marks. "Most of the management of the badly performing companies were replaced during shareholder meetings in March," a creditor official said.

The restructuring companies have suffered from stricter audits, which resulted in steeper loss figures, and the depressed real estate market, which forces companies to sell assets at low prices or makes it impossible to sell them at all.

by Huh Kwi-shik