Korean govt to map out relief measures for large firms fighting virus fallout

2020.03.26 14:41:54

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The South Korean government will convene a meeting on Friday to discuss aid measures to help conglomerates reeling from the impact of the coronavirus pandemic.

The government said Thursday that it will hold a ministerial meeting with the Ministry of Economy and Finance, Financial Services Commission and Ministry of Trade, Industry and Energy to explore ways to help large firms suffering from liquidity shortages, after announcing on Tuesday that large business groups are also entitled to its 100 trillion won ($81.3 billion) worth relief package.

The first agenda for discussion will be measures for Doosan Heavy Industries & Construction Co., the power plant equipment maker that is grappling with a liquidity crisis due to a dearth of new orders amid the government’s nuclear phase-out policy.

The company asked its underwriter Export-Import Bank of Korea to convert foreign currency-denominated bonds reaching maturity in April to loans.

The ministers will also discuss how to help full-service carriers, Korean Air Lines and Asiana Airlines, which have entered emergency management mode on the back of the swelling losses from plunging travel demand. They called for state guarantees for new debt issues.

The Korea Development Bank (KDB) is mulling additional measures to aid the aviation industry after providing 40 billion won out of 300 billion won allocated for local low-cost carriers.

The government has set 6.7 trillion won for primary collateralized bond obligations (P-CBO) program, which allows firms with low credit ratings to borrow money at low costs through state payment guarantee. It will also provide 2.2 trillion won to corporate debt takeover scheme, in which KDB purchases 80 percent of new bonds offered by companies to pay back debts reaching maturity.

By Pulse

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