Korea launches $33 bn bailout fund for large companies starting with airliners, shippers

2020.05.20 14:14:49

Finance Minister Hong Nam-ki. [Photo by Yonhap]이미지 확대

Finance Minister Hong Nam-ki. [Photo by Yonhap]

The government-led 40 trillion won ($33 billion) corporate relief fund aimed to sustain household South Korean companies weather the pandemic setbacks will first go to aid airliners and shippers with minimum debt of 500 billion won ($407.5 million) and payroll of 300.

The fund to be installed at state lender Korea Development Bank (KDB) will be spent on companies deemed “influential” to the national economy and job market, according to the outline.

Under the guideline for the new fund operation detailed out by the finance ministry on Wednesday, the financial aid will granted in loans, convertible securities, asset purchase or debt guarantee. Companies receiving grant must sustain minimum 90 percent of their employees and will be barred from stock buyout and dividend payout while they are under bailout.

Executive pay also must be frozen.

이미지 확대
To ensure long-term return for the public bailout, 10 percent of the rescue fund will be in the form of securities that can later be converted to equity.

Companies eligible can apply, and the KDB backed by a pool of private experts will review applicants to package relief program starting next month.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]