The collateral-to-stock ratios of seven business groups including Doosan, Dongbu, and Hanjin were in excess of 50 percent while those for 11 groups including Samsung, Hyundai Motor, and Lotte were zero.(image: Kobizmedia/Korea Bizwire)
SEOUL, Oct. 16 (Korea Bizwire) – As much as 10 percent of all stocks held by the owner families of top-30 conglomerates is being pledged as collateral for their loans with banks and other financial institutions. Of these, the collateral-to-stock ratios of seven business groups including Doosan, Dongbu, and Hanjin were in excess of 50 percent while those for 11 groups including Samsung, Hyundai Motor, and Lotte were zero.
According to data released by CEO Score, a website tracking Korea’s corporate performances, on October 15, the top-30 corporations provided their owners’ stocks worth 6.35 trillion won as collateral for loans, accounting for 9.98 percent in total shareholding of 63.63 trillion won.
The data also revealed that 425 owner family members are holding shares in 116 companies within the business groups. Of these, 108 members pledged their holdings in 38 firms as security for their loans. That means about one in every four owner family members (25.4%) used their stocks to get loans.
Of the 30 biggest groups, according to CEO Score data, Doosan had the highest level of stocks provided as collateral. As much as stocks worth 894 billion won were given out as collateral out of the total stockholding of 940 billion won, or the share of 95.1 percent. Doosan was closely followed by Dongbu and Hanjin whose collateral-to-stock ratios were in excess of 90 percent.
By Sean Chung (schung10@koreabizwire.com)
