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Loan guarantees among conglomerate units top 60 tln won in 2017

2018/03/07 08:29

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SEOUL, March 7 (Yonhap) -- Loan guarantees among affiliates of South Korea's top 30 business groups exceeded 60 trillion won (US$56 billion) in 2017, with those to overseas units taking up the lion's share, a market tracker said Wednesday.

The amount of debt payment guarantees among units of the leading conglomerates came to 62.6 trillion won last year, or 6.3 percent of their combined equity capital worth 1,055 trillion won, according to CEO Score.

Loan guarantees made to overseas affiliates stood at 58.9 trillion won, accounting for slightly over 94 percent of the total.

Hyosung was the only conglomerate whose loan guarantee-to-equity ratio topped the 50 percent mark. The group's inter-affiliate loan guarantees reached 2.69 trillion won, or 52 percent of its equity capital, with those to overseas units reaching 2.43 trillion won.

"Hyosung has been building several overseas plants due to a high percentage of overseas sales to total shipments. That's the main reason for the large amount of overseas loan guarantees," a group official said.

Samsung Group's loan guarantees to overseas units was the largest at 14.49 trillion won, or 5 percent of the conglomerate's equity capital.

CEO Score advised the nation's corporate watchdog to keep close tabs on conglomerates with large debt guarantees to overseas affiliates, which could put them in financial straits in case of poor overseas business.