34 industrial groups in deep debt

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34 industrial groups in deep debt

A total of 34 business groups were designated as heavily-indebted conglomerates and are required to improve their financial status, the financial regulator said yesterday.

The Financial Supervisory Service (FSS) said the combined debts owed by the 34 heavy borrowers, including Hyundai Motor and Kumho Asiana, reached 267.2 trillion won ($237 billion) at the end of 2011, accounting for 16.5 percent of total corporate lending extended by banks and other financial firms.

This year’s number of heavy corporate debtors fell from 37 a year earlier, according to the watchdog.

The regulator annually releases the list of industrial groups with heavy debts to the seven main local banks, including top player Kookmin Bank and Woori Bank, in order to assess the financial health of the indebted conglomerates.

The main lenders will examine the financial structure of their borrowers by the end of April. Those who are found to have trouble repaying their debts will be required to sign an agreement with their lenders by the end of May on how to shore up their financial health, the regulator said.

Last year, six heavy corporate debtors, including Hanjin and Dongbu, signed deals with their main lenders to improve their financial footing.

The number of companies affiliated with the heavy corporate debtors rose by 186 to 3,562 as they sought to secure mergers and acquisitions. Yonhap

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