Creditors set to weed out dozens of troubled firms

SEOUL, July 13 (Yonhap) -- South Korean creditor banks are seeking to put some 30 large, financially troubled firms under a debt workout program or kick them out of the market, industry sources said Wednesday.
Each year, creditor banks assess the financial soundness of companies whose loans surpass 50 billion won (US$47 million) and classify them into the four categories: A, B, C, and D.
C-rated companies can apply for a debt workout program, while D-rated firms are liquidated or placed under a court receivership.
This year's annual assessment shows that around 30 companies were rated as C or D, according to the sources.
A bulk of the financially-shaky firms were builders as a prolonged slump in the property market hit them hard, the sources said.
But construction firms affiliated with the country's major conglomerates were not included in the blacklist as they secured capital by selling shares or debts to their sister firms, they said
"The list doesn't seem to include companies that are likely to have substantial impact on the market. There are no big-name construction firms that are well known in the market," said an official close to the matter.
The sources also said the number of C- or D-rated companies declined from a year earlier, possibly on the back of ongoing efforts to restructure debt-ridden companies in the aftermath of the global financial crisis.
In 2010, a total of 65 firms were rated as C or D.
mil@yna.co.kr
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