810 S. Korea firms file for receivership last year

January 16, 2014 Leave a comment

810 S. Korea firms file for receivership last year

Kim Hyo-hye, Shin Soo-hyun

2014.01.13 18:09:58

A host of South Korean companies have resorted to the court after failing to tackle financial woes amid the sputtering economy. The number of companies, which filed for the corporate revival process that equates to court receivership or composition in the past, stood at 810 last year, the highest since the 1998 Asian financial crisis.
The combined assets of all the troubled corporations under management of the court bankruptcy divisions topped 30 trillion won, on a par with assets of the country’s 10 biggest conglomerates. A total of 810 companies filed for corporate revival last year, said sources at the 14 regional courts’ bankruptcy divisions nationwide and investment banks Monday. The number hit a 15-year high since the Asian financial crisis, when corporations went bankrupt in record numbers.
The bankruptcy divisions of the Seoul Central District Court (SCDC) and Suwon District Court, both of which are in areas most densely packed with companies, reported 272 and 125 cases of corporate revival applications last year respectively, up from 266 and 101 in 2012.
As an increasing number of companies are put under receivership, the courts’ bankruptcy divisions have been managing assets comparable to those of conglomerates. Corporations that filed for receivership to the SCDC’s bankruptcy division last year held a total of 17.4 trillion won ($16.4 billion) in assets. This is larger than 17.1 trillion won of Dongbu Group, Korea’s 17th biggest conglomerate in terms of total asset value as of April of 2013, and close to 22.8 trillion won of Shinsegae Group and 20 trillion won of LS Group.
The combined assets of all companies managed by the courts’ bankruptcy divisions nationwide are estimated at 30 trillion won, according to the industry. The size of the assets is similar to those of the top 10 conglomerates, including Hanwha Group and Hanjin Group.
Among the companies that entered the revival process last year, builders took up an overwhelming majority of 28 percent.
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment