SEOUL, Jul. 20 (Korea Bizwire) — Nearly half of South Korea’s large industrial groups are suffering from chronic financial trouble due to high levels of debt, industry data showed Sunday.
Out of 48 non-financial business groups on an antitrust watchlist, 23 posted a debt ratio of more than 200 percent on a consolidated basis as of end-2014, according to the data. Twenty one of them saw the ratio hit 200 percent for three straight years.
The debt ratios of nine conglomerates, including Dongbu Group, Hanjin Group and Daewoo Shipbuilding & Engineering, rose more than 50 percentage points over the recent two years.
Dongbu Group, the 28th-largest conglomerate with building and non-life insurance units under its wing, disclosed that its debt-equity ratio soared to 864.21 percent in 2014 from 397.57 percent in 2012.
Stock trading of cash-strapped Dongbu Corp., its construction affiliate, has been suspended by the bourse operator since May.
Daewoo Shipbuilding’s debt ratio jumped to 325.96 percent last year, up from 255.71 percent two years ago, with the shipyard experiencing a freefall in stock price due to massive losses.
“The business groups have fallen into chronic financial difficulties as their debt ratios have exceeded 200 percent for three years,” said Kim Woo-chan from the Economic Reform Research Institute. “But they haven’t undergone proper debt restructuring to improve their balance sheets.”