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24 Companies Have Availed Of Fast-Track Corporate Restructuring

By February 28, 2017 at 1:43 am
The law allows businesses to conduct intra-corporate mergers and spinoffs that will exempt them from antitrust laws and stringent financial market regulations. (Photo : Getty Images)

Five more South Korean companies availed of the government's program for voluntary corporate restructuring through fast-track legal and administrative means, according to trade ministry officials Tuesday.

A government panel approved five companies, which include ship materials manufacturing firm Kahn PI Co., Sungwook Steel Co. and LS Group affiliate LS Metal, for endorsement of their restructuring proposals aimed to boost competitiveness, according to the Ministry of Trade, Industry and Energy.

A total of 24 companies has become beneficiaries of the newly established law that has an objective to facilitate voluntary corporate restructuring. It is part of the South Korean government's efforts to expedite corporate restructuring in struggling industries such as petrochemicals, steel, and shipbuilding.

The ministry said Kahn PI plans to diversify its business portfolio, while LS Metal will likely sell off its copperplate lines and improve its stainless steel facilities in order to meet changing global trends.

In January, the government approved the voluntary restructuring of four small and mid-sized South Korean firms, including cargo loading service firm G-Mos Co. and metal mold manufacturer Najai Co.

In December last year, five South Korean companies, including South Korea's biggest chemicals manufacturer LG Chem Ltd. received government approval for voluntary corporate restructuring.

LG Chem, which generated 20.2 trillion won in sales in 2015, said its polystyrene facilities in Yeosu will be converted into higher-ended acrylonitrile butadiene styrene copolymer lines. 

The plan will result in the company's output of polystyrene, a chemical that is currently in abundant supply, to drop to 50,000 tons per year from 100,000 tons. LG Chem has a 14 percent share of the South Korean polystyrene market.

The law, which became effective in August last year, hopes to help businesses by simplifying procedures for companies to conduct intra-corporate mergers and spinoffs that will exempt them from strict financial market regulations and antitrust laws. Companies will also be given subsidies for research and development on corporate restructuring as well as tax benefits.

The new law also requires companies that want to avail of the fast-track corporate restructuring procedures to obtain government approval. 

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