A consortium led by South Korean electric carmaker Edison Motors Co has agreed to acquire debt-ridden SsangYong Motor Co Ltd for 305 billion won ($254.65 million), SsangYong Motor said on Monday, Reuters reported. SsangYong is burdened with high debt and its vehicle sales last year fell to 84,496, down about 21% from a year earlier, a regulatory filing from the automaker showed. The automaker reported a January-September 2021 operating loss of 238 billion won from revenue of 1.8 trillion won.
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South Korea
Activity in South Korea's factories expanded at the fastest pace in three months in December but the economy struggled to gather momentum as rising global coronavirus cases and continued supply constraint weighed on production and overseas demand, Reuters reported. The IHS Markit purchasing managers' index (PMI) for the final month of the year rose to 51.9 from 50.9 in November, remaining above the 50 threshold that indicates expansion in activity for a 15th consecutive month.
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Edison Motors is acquiring SsangYong Motor, the South Korea-based automobile manufacturer that has gone bankrupt, and it was reported that the deal may be completed this week, Economic Times reported. Sources stated that the merger is likely to be sealed in a few days, with Jan. 7 being the latest. "We need to adjust the contents of the contract, but if the discussion goes well, it can be done within this month," an official from Edison Motors said in a statement.
Personal and corporate bankruptcies in South Korea increased by more than 10 percent last year, data showed Monday, reflecting the economic impact of COVID-19 on both businesses and households, the Korea Herald reported. According to the report released by the National Court Administration, the number of personal bankruptcies filed in 2020 rose by 10.4 percent from the previous year, from 45,654 cases to 50,379 cases. Last year’s tally was the biggest figure since 2015.
South Korea’s leading opposition candidate warned of a potential collapse in the housing market and a spike in bankruptcies as interest rates rise, blaming President Moon Jae-in for letting debt levels hit a record through expansionary spending, Bloomberg News reported. Hong Joon-pyo, one of the top-ranked conservatives seeking to be the next president, said the current level of fiscal spending is unsustainable with government debt expected at over 1,000 trillion ($855 billion) next year.
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South Korea became the first major Asian economy to raise interest rates Thursday, with more hikes in the pipeline as its central bank indicated that financial risks pose a bigger threat to the economy than the latest virus outbreak, Bloomberg News reported. Governor Lee Ju-yeol said the quarter-percentage-point hike to 0.75% still left rates in an accommodative position that supports the economy. He added that the current delta wave is having less of a negative impact on growth as consumers adjusted behavior to the new normal of the pandemic.
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South Korea’s ballooning household debt set new records last quarter, offering support for views that the central bank will raise interest rates as early as this week to deflate a debt bubble, Bloomberg News reported. Total credit extended to households jumped 10.3% from a year earlier to 1,806 trillion won ($1.54 trillion), according to a Bank of Korea statement on Tuesday. The 169 trillion won increase marked the largest gain since data going back to 2003. From the previous three months, credit rose by 41.2 trillion won, the biggest increase for an April-June quarter.
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South Korea's consumer inflation accelerated in July, staying at a nine-year peak marked in May, as hot weather conditions lifted prices of fresh food, while oil products and housing rental and other services costs continued rising, Reuters reported. The consumer price index (CPI) last month rose 2.6% year-on-year, Statistics Korea data showed on Tuesday, accelerating from a 2.4% increase in June and beating a 2.4% increase tipped in a Reuters survey.
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South Korea has recouped 69.7 percent of the public funds it spent to bail out troubled financial firms since the 1997-1998 Asian financial crisis, the financial regulator said Monday, the Yonhap News Agency reported. The country retrieved 327.9 billion won (US$284.3 million) in the second quarter out of the 168.7 trillion won in state funds spent to save firms from bankruptcy, according to the Financial Services Commission (FSC). The recovery rate was up from 69.5 percent recorded at the end of March, it added.
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The daughter of former Seoul Mayor Park Won-soon said her father left behind mountains of debt because he gave away the family fortune to various organizations, including women's groups, before he died last year, UPI reported. Jung Chul-seung, the family's legal counsel, said that the statement from the woman, who remains unidentified, was part of a recent conversation, Dong-A Ilbo and Asia Business reported.