Financial authorities have selected 34 cash-strapped companies as targets for drastic downsizing. They will either enter debt workout programs or be put into court receivership.
A spokesman said the Financial Supervisory Service evaluated the financial health of 601 companies that borrowed more than W50 billion from banks, and classified 11 as in need of workout programs and 23 as candidates for court receivership.
Companies subject to workout programs must negotiate with lenders and pursue joint steps to bolster their financial conditions, while the second group face court receivership if they cannot turn their situation around.
Last year, 40 companies were selected compared to 36 this year. But this year more companies face cash flow problems.
Out of the selected companies, most are builders with 21, followed by three shipbuilders and shipping companies, one steelmaker and nine others.