The top shareholder of South Korea’s second-largest carrier, Asiana Airlines, said on Monday it would sell its entire stake in the debt-ridden firm to keep it afloat, sending shares of the carrier and its budget arm 30 percent higher, Reuters reported. The move caps weeks of financial uncertainty involving the carrier which started last month when it failed to win auditors’ sign-off on its 2018 financial statements, triggering warnings of credit ratings downgrades and the resignation of the parent group’s chairman.
South Korea
Read more
South Korea’s cash-strapped Asiana Airlines Inc plans to cut unprofitable routes and the size of its fleet to improve its financial health, Chief Executive Han Chang-soo said in a letter to employees on Monday. Han’s co-chief executive resigned on Thursday and its debt-ridden parent Kumho Asiana Group sought financial support from its biggest creditor after an accounting fiasco triggered warnings of credit rating downgrades, Reuters reported. He also said the company would sell more assets to secure liquidity, but did not elaborate.
South Korean cryptocurrency exchange Coinbin has declared bankruptcy after suffering millions of dollars in losses, in part due to claimed embezzlement, CoinDesk reported. Coinbin published a notice on its website on Wednesday, stating that “increased debt” and “government regulation” led to the firm having to halt its business operations. Specifically, it said regulators’ suspension of its ability to issue virtual accounts to users was part of the cause, as well as increased operating expenses and liabilities from its collapsed subsidiary exchange Youbit.
The South Korean government has attempted to remedy the problem but its roots are deep: the country’s powerful conglomerates and offshore competition are squeezing smaller employers, the Financial Times reported. “Although SMEs account for a small portion of the country’s GDP, their trouble has a big impact on the job market and consumption,” said Lee Sang-jae, an economist at Eugene Investment and Securities. Chinese competition is hollowing out vast tracts of industry that once girded South Korea’s export-led economy.
South Korean has announced a fresh set of measures to boost economic growth and create jobs by offering financial support for smaller companies and a fuel tax cut to spur consumption. The latest measures come as the administration of President Moon Jae-in comes under growing pressure to revitalise a stalled economy and weak jobs market, the Financial Times reported.
South Korea’s Hyundai Merchant Marine is getting another $5 billion in state funding to finance a series of new orders for megaships as the company tries to compete with bigger Asian and European rivals in a difficult container shipping market. HMM, the country’s de facto flag carrier after the collapse of Hanjin Shipping Co. in 2016, will spend $2.8 billion to buy 20 large container vessels from South Korean shipbuilders, The Wall Street Journal reported. The rest of the money will likely be used to buy container terminals, according to people involved in the matter.
Read more
South Korea’s central bank warned on Thursday that household debt was growing much faster than the Organization for Economic Cooperation and Development average as large mortgages and high rents drive up indebtedness, Reuters reported. “Since the end of the global financial crisis, South Korea’s household debt growth has significantly exceeded that of the OECD, and the trend will continue,” the Bank of Korea (BOK) said in a financial stability report.
Read more
South Korea's Korea Electric Power Corp (KEPCO) has lost its preferred bidder status to buy Toshiba's NuGen nuclear project in Britain as Toshiba looks at other alternatives, the Japanese company said on Tuesday. The project in Moorside, northwest England, was expected to provide around 7 percent of Britain's electricity when built, but has faced setbacks after Toshiba's nuclear arm Westinghouse went bankrupt last year, the International New York Times reported on a Reuters story.
Read more
The economy of South Korea, which is very reliant on China, may see more adverse impact than previously expected from China’s plan for deleveraging, the Bank of Korea said in a report on Sunday, Bloomberg News reported. South Korea’s gross domestic product growth could be 0.3 percentage point less than expected in 2018 and maybe 1.2 percentage point less in 2020 because of Chin’s plan to cut financial risks by deleveraging, the central bank said in its report, citing data from Oxford Economics and Fitch.
Read more
Shares of Asiana Airlines shot up more than 20 per cent on Tuesday morning on a media report that SK Group is considering buying the troubled airline - a claim the conglomerate later denied, the Financial Times reported. Asiana shares climbed as much as 23 per cent to Won5,130 ($4.57), their highest since May 21, after local online media News Tomato said SK Group, South Korea’s third-largest conglomerate, is considering a takeover. But SK Holdings, the holding company of SK Group, denied the media report in a regulatory filing, making Asiana shares give up much of the gains.
Read more