SEOUL, Dec 8 (Reuters) - South Korea on Friday said the government’s efforts to overhaul debt-ridden companies will focus on enhanced monitoring of their financial performance, to prevent any insolvency and bail-outs.
With thousands of companies classified as “zombies” whose profits don’t cover loan interest payments, the government will make them focus on core, profitable businesses to make sure they don’t reduce the economy’s competitiveness, a government statement said.
“Related government agencies and experts from the private sectors will conduct analysis of business outlook, its competitiveness and other risk factors on a regular basis,” the statement said.
The nation’s shipbuilding sector is still floundering with South Korea’s state lenders having injected more than 7.1 trillion won ($6.49 billion) into Daewoo Shipbuilding & Marine Engineering Co. since 2015, in the biggest bailout of a single company in over a decade.
Hanjin Shipping Co., previously among the world’s largest container lines, was declared bankrupt in February, after its creditor banks halted further support.
Reporting by Cynthia Kim; Editing by Sam Holmes