FSC refutes reports on additional industry restructuring

The Korean government said Tuesday that it has reviewed whether to add another industrial sector for restructuring as part of efforts to drive out heavily indebted companies in ailing sectors that might drag down the Korean economy.

The Financial Services Commission said, however, it has yet to find any specific industry in need of further restructuring.

“As of now, there is no industry that needs further discussion for restructuring, besides the five sectors,” the FSC said in a statement.

“However, we will continue to monitor a global industrial trend and possibility of a supply glut,” it said.

Next week, FSC chairman Yim Jong-yong will meet with vice ministers from economy-related ministries to check on the progress of the restructuring of five ailing industries -- shipbuilding, shipping, construction, steelmaking and petrochemicals.

Prior to the release of the FSC statement, local news reports had said the government may add one or two more vulnerable industries, such as display or semiconductor.

Finance Minister Yoo Il-ho last week highlighted the government’s drive for corporate restructuring, publicly mentioning his concern for the country’s No. 2 shipping liner Hyundai Merchant Marine which is struggling under mounting debt on faltering global trade.

On Monday, Financial Supervisory Service governor Zhin Woong-seob urged banks to carry out faster and more drastic corporate restructuring moves at a meeting with the heads of nine banks.

The FSC is to announce a list of companies for restructuring in July, after analyzing credit risks of companies that have taken out more than 50 billion won ($44 million) debt from banks.

Last year, 54 companies out of the 1,900 subjected to credit analyses failed to meet a set of financial health requirements, according to the FSC. The 54 were placed under a debt-rescheduling program or a court receivership.

By Kim Yoon-mi (yoonmi@heraldcorp.com)