UPDATE 1-S.Korea top firms' debt ratios at 6-yr high in 2008

* Debt-to-equity ratio for S.Korea top companies leaps

* FSC to unveil outlines of corporate restructuring on Thurs

* About 10 groups to be picked to make harsh reforms- Yonhap

(Adds FSC announcement, report of banks' assessment)

By Kim Yeon-hee

SEOUL, April 29 (Reuters) - The average debt-to-equity ratio
for top South Korean business groups jumped to its highest in six
years in 2008, data showed on Wednesday, ahead of the realease by
creditor banks next month of a month-long assessment of big
companies.

Heavy borrowing, liabilities related to derivatives products
and translation losses on foreign debt contributed to the sharp
rise in debt, while cash assets increased by 29 percent, the Fair
Trade Commission said in a statement.

Separately, the Financial Services Commission is set to
release the outlines of the restructuring process for 45 large
business groups on Thursday, according to the financial watchdog,
which may indicated tougher measures to reform conglomerates.

The ratio for the country's 48 large business groups climbed
to an average 119.9 percent at the end of 2008, its highest since
2002's 122.3 percent. That compared with 98.4 percent for 41 big
conglomerates a year earlier.

The number of groups being surveyed increased last year, as
the agency probed groups with more than 5 trillion won ($3.71
billion) in assets. The data excluded debt ratios for financial
units.

The commission said the companies had secured more cash
through borrowing or bond issues to improve liquidity during the
global credit squeeze and deepening economic uncertainty.

Total debt at the 48 business groups came to 691.9 trillion
won at the end of last year, compared with cash holdings of 62
trillion won.

The five biggest conglomerates -- Samsung, KEPCO (015760.KS),
Hyundai Motor (005380.KS), SK and LG -- posted the lowest gearing
of 82.81 percent among the surveyed groups.

By comparison, the average ratio for those ranked between 11
and 20, including Hyundai Heavy Industries (009540.KS) and Daewoo
Shipbuilding (042660.KS), stood at 203.80 percent.

South Korean banks will sign agreements with some
conglomerates in May to enhance their balance sheets by selling
non-core assets pre-emptively before they turn sour.

Yonhap news reported on Wednesday that 14 groups were graded
by creditor banks as below normal for their balance sheets as of
end-2008, citing an unnamed senior bank official.

"We are in the last stage of talks to finalise the list of
groups with which to sign contracts to improve their financial
status," the official was quoted as saying.

"It looks like about 10 groups will be on the list."

The report did not identify the companies, but added that
some shipbuilders might avoid bank-driven restructuring, taking
into consideration that a big chunk of their debt was related to
down payments for vessel orders received.

Following are the debt-to-equity ratios in percentage terms
of business groups ranked in terms of assets

Top 5 82.81

6-10 130.72

11-20 203.80

21-30 123.84

31-40 152.59

41-48 136.74

------------------------

average 119.88

($1=1348.9 Won)

(Editing by Chris Lewis)