Debt owed by 41 major South Korean public organizations would snowball from 520 trillion won ($483.7 billion) this year to 600 trillion won in 2017
September 27, 2013 Leave a comment
41 public agencies’ debt to balloon to $558bn in 2017
Lee Sang-duk
2013.09.27 15:52:37
Debt owed by 41 major South Korean public organizations would snowball from 520 trillion won ($483.7 billion) this year to 600 trillion won in 2017, according to a report. This estimate is based on the assumption that the public companies do not seek to cut back on debt, and suggests they will need to tighten the belt to pay back much of the debt.
As such, the government will set up an intra-governmental task force dedicated to tackling the public debt and undertake intensive restructuring, such as asset disposal, to bring down the public debt to around 573 trillion won by 2017. Such plan, which will be implemented between 2013 and 2017, was finalized at a fiscal management meeting presided by deputy prime minister and finance minister Hyun Oh-seok at the government complex in Seoul Friday.
“Public companies will have to redeem their debt with their own income to ensure their financial status will not have a spillover into state finances,” said the deputy prime minister. “The combined debt ratio of the 41 public organizations will be lowered from 220 percent this year to 210 percent by 2017.” In other words, the aggregate debt would rise from 520 trillion won this year to 573 trillion won by 2017 if the government meets its target of cutting the debt ratio.
The 41 public agencies, which will be under tight control of the government, include 39 companies with assets of two trillion won or more, Korea Coal Corporation with impaired capital, and Korea Trade-Investment Promotion Agency (KOTRA) whose losses are covered by the government.
About bambooinnovator
Bamboo Innovator 