Four firms join restructuring plan

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Four firms join restructuring plan

The government approved restructuring plans by four companies that will become beneficiaries of the so-called One Shot Act, a new law designed to facilitate and speed up voluntary corporate restructuring.

Four companies including GMOS and Standard Industries will receive a range of state-led support, including tax benefits and subsidies on top of fast-track procedures for mergers and acquisitions under the new Corporate Vitality Enhancement Act, the Ministry of Trade, Industry and Energy said Thursday. There are now 19 companies benefitting from the law.

“The Corporate Vitality Enhancement Act started to settle last year in the country as a tool to proceed with the management turnaround plans,” said Nam Kyung-mo, a director at the Trade Ministry. “We believe there will be more number of beneficiaries this year not only from the manufacturing sector but also other industries including that of the service sector.”

GMOS, a firm that ships and store materials for the shipbuilding industry, agreed to sell its storage as its sales decreased in a sluggish shipbuilding industry. The company will also reduce the amount of products that it stores or transports.

Standard Industries, which produces materials for the offshore plant sector, will sell some of its manufacturing plants while diversifying its business lines to other areas including developing materials for plant business for various industries such as oil refining and power plants.

Najai, an automobile part manufacturer in the southern port city of Ulsan, agreed to sell its manufacturing plants and facilities and focus on manufacturing high-value added materials as the amount of orders received by the company continues to decrease due to Chinese competitors.

Of the 19 beneficiaries approved by the government, seven are shipbuilding and offshore plant companies and four of them are steel companies. Another three are petroleum-related companies. Companies from the three industries that the government is pushing with corporate restructuring accounted for more than 70 percent of the total beneficiaries.

Through the One Shot Act, the government plans to give financial support to beneficiaries for research and development projects and to have them find new business lines, along with tax benefits.

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