Foreign Companies" Assess 5 Big Chaebols PlansForeign securities companies commented that Korea's five big chaebols will need to sell 69 trillion won worth of assets and subsidiaries to lower their respective debt ratios to 200%.
They predicted that all Korean conglomerates including the five biggest chaebols will be uncooperative to the government's demands for restructuring.
They also analyzed that the chaebols' strategy is to secure the maximum support of the government and financial institutions.
Korean Investment Trust revealed on December 1 that it received these opinions from six foreign securities companies including the HSBC (Hong Kong Shanghai Banking Corporation), Daiwa, and Credit Lyone.
They expected that the chaebols will, first, increase capital by offering additional stock to current shareholders and then perform restructuring moves according to the priority of dividing companies, inducing foreign investment, and selling assets.
The HSBC assessed that the five chaebols will need to perform 35 trillion won worth of capital increase or gain 50 trillion won worth of profit to lower their debt ratios. It also argued that chaebols should perform a variety of restructuring moves including increasing profits and selling assets.
Daiwa Securities commented that the five chaebols' reform is required by all foreign investors as well as the IMF and IBRD. It added that Korea cannot expect to raise its credibility without success in these areas.
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