S. Korean trade minister emphasizes market-led corporate restructuring

Trade Minister Joo Hyung-hwan

SEJONG, April 26 (Yonhap) — South Korean trade minister said Tuesday that the government will support market and creditor-led corporate restructuring efforts amid rising public calls for stricter action to sort out marginal companies.

“We encourage creditors to take the lead in carrying out restructuring processes based on the market system,” Trade Minister Joo Hyung-hwan said at a breakfast meeting with the chief executives of 10 large business groups.

“For relatively healthier companies, we will map out legal systems to help them undertake a thorough overhaul in advance.”

The South Korean government has indulged in leading the corporate restructuring process as part of efforts to prevent any economic fallout from a sudden collapse of major firms amid growing economic uncertainties at home and abroad, including a looming U.S. interest hike and sluggish domestic demand.

Five industries, including shipbuilding and shipping sectors, are subject to the pressing refurbishing project as they were hit by a protracted business slump and massive losses.

Hanjin Shipping Co., South Korea’s biggest container carrier, has submitted its self-rescue measures to its creditors led by the state-run Korea Development Bank, while subcontractors of three leading shipyards led by Hyundai Heavy Industries Co. are set to conduct massive layoffs due to a sharp drop in orders.

“Some business groups have made efforts to reorganize their business structure,” said Joo. “The government will provide full support to these companies to expand their business horizons and their technological capability through mergers and acquisitions.”

He also said the government will do its best to remove unfair trade barriers that have hindered South Korean exporters from doing business overseas.