Five more companies to receive ‘One Shot’ fundsThe government approved restructuring plans for five more companies to become beneficiaries of the Corporate Vitality Enhancement Act, also known as the One Shot Act, a law passed last year to facilitate and speed up voluntary corporate restructuring.
The companies will receive a range of tax benefits and subsidies on top of fast-track M&A approval under the act, the Ministry of Trade, Industry and Energy said Tuesday. There are now 24 companies benefitting from the legislative act.
“The Corporate Vitality Enhancement Act was introduced last August as a tool to proceed with turnaround plans,” said Kim Jong-chul, a director at the ministry. “About five companies have been approved a month on average for the past six months. The act has become a major tool for companies planning to proceed with turnaround.”
Five companies were approved in December and four more in January. The latest five companies include a range of metal and shipbuilding companies.
LS Metal, a metal-producing affiliate of the nation’s 16th-largest conglomerate, LS Group, agreed to sell some of its factories and diversify its business to other areas including steel materials that are more highly valued.
Khan PI, a company that makes goods for shipbuilders, said it was hit hard by the country’s weak shipbuilding industry and agreed to lower the number of its products.
Sungwook Steel agreed to shut down distribution centers in the country, as Korea is facing an oversupply of steel, and said it would use new strip casting technology that the company co-developed with Posco to shape and produce metal.
Of the 24 One Shot Act beneficiaries approved by the government, nine are shipbuilding and offshore plant companies and five are steel manufacturers. Another three are petroleum-related.
Companies from these three industries in which the government is pushing corporate restructuring accounted for more than 70 percent of all beneficiaries.
Fifteen of the companies are small and medium-sized, four are considered mid-to-large and five are big firms. The Ministry of Trade, Industry and Energy said smaller companies account for nearly 80 percent of all beneficiaries.
Through the One Shot Act, the government gives financial support to companies with approved research and development projects, helps them find new business lines and provides tax benefits.
BY KIM YOUNG-NAM [firstname.lastname@example.org]
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