Debt stacks up at top conglomerates

Korea’s top 30 conglomerates’ debts stood at nearly 1,000 trillion won ($900 billion) as they increased their borrowings in recent years to expand their businesses and to secure cash amid the economic slowdown, an online business data provider said yesterday.

The debts stood at 994.2 trillion won last year, up 28.7 percent or 221.9 trillion won from 2009, according to Chaebol.com, which closely monitors developments of the country’s conglomerates, known as chaebol.

The business data provider attributed the surge to large-scale mergers and acquisitions of local companies and increased borrowings meant to secure liquidity amid the global economic slowdown stemming from the euro zone debt crisis.

SK Telecom, the nation’s top mobile carrier and the group’s flagship, has acquired Hynix Semiconductor, the world’s second-largest memory chipmaker.

Meanwhile, Hyundai Motor Group, the world’s fifth-largest carmaker, has taken over Hyundai Engineering and Construction.

Chaebol.com said the number of affiliates increased to 1,165 last year, up from 983 in 2009. It also said conglomerates’ average debt ratio stood at 149.6 percent last year, down from 159.2 percent in 2009.

Woongjin Group, a troubled mid-size conglomerate, has the highest increase of debt ratio among the 30 conglomerates between 2009 and 2011, the data showed.

The business data provider said Woongjin Group borrowings stood at 4.3 trillion won last year, up from 1.5 trillion won in 2009. Its debt ratio stood at 217.6 percent last year, up from 130 percent in 2009.

Yonhap