Korea Line Corp said it has started restructuring after a local court approved placing the financially-strapped dry bulk group in receivership, Reuters reported. South Korea's second-biggest dry bulk shipping line filed for bankruptcy protection in late January, struggling with high-cost charter contracts amid a sharp drop in freight rates since the economic turmoil of 2008. This had rocked confidence in the shipping industry and provoked fears that other bulk shippers may be exposed to Korea Line, weighing on their shares.

Korea Line Corp., South Korea’s second-largest operator of dry-bulk ships, filed for receivership after a global oversupply of vessels caused rates to tumble to the lowest in almost two years, Bloomberg reported. The shipping line intends to maintain operations, it said today in an e-mailed statement, after making the filing at the Seoul Central District Court. The company, which didn’t say how large its debts were, is seeking to freeze assets. Korea Line, unprofitable in six of the past seven quarters, halted its shares as it works to restructure debt.

Hyundai Motor Group on Friday signed a preliminary agreement to buy Hyundai Engineering & Construction Co. in a deal worth up to $4.72 billion, a step that brings nearer the completion of the drawn-out sale process for South Korea's largest construction company, which has been marked by a fierce family feud, Dow Jones Daily Bankruptcy Review reported. Hyundai E&C, the founding component of what was once the country's largest conglomerate, was put on the block in July.

The Bank of Korea raised its benchmark interest rate Thursday, while the government issued a package of steps to stabilize consumer prices, moves that show the concern among policy makers about building inflationary pressures as the economy recovers, The Wall Street Journal reported. The central bank's surprise decision to raise its policy rate by 0.25 percentage point to 2.75% and the government's set of measures, including a freeze on public-service charges such as those for electricity and gas, show how the authorities now view inflation as one of their main policy challenges.

The new chairman of South Korea's financial regulator said the government will act sternly against financial-market disruptions or distortions and ensure systemic stability, the Wall Street Journal reported today. The comments come as Seoul takes steps to protect the domestic market from risks posed by rapid foreign capital flows into and out of the country. "The government will respect the financial industry's autonomy and provide the grounds that will allow the industry to develop on its own," Financial Services Commission's Kim Seok-dong, who officially assumed his post today.

Korea Asset Management Corporation (KAMCO) will buy about 5 trillion won ($4.38 billion) worth of bad loans from financial institutions and assets from companies under restructuring this year, local media said on Sunday, Reuters reported. The planned purchase amount is a third of KAMCO's purchases set for 2010 a year earlier. South Korea's news agency Yonhap quoted KAMCO Chairman and Chief Executive Chang Young-chul as saying that KAMCO would buy 3.5 trillion won worth of bad loans from savings banks and one trillion won worth of bad loans from commercial banks.

Korea’s national debt has increased at a rapid pace, spawning fears that the country could face a debt crisis akin to the one Europe has gone through in the wake of the global financial crisis, The Korea Times reported. What is of greater concern is that the pace of the debt growth is expected to gain momentum as the government must eventually spend more and more due to the rapidly aging population and possible reunification of the two Koreas. With snowballing debt, the ability of the Lee Myung-bak administration to manage the debt is being put into question.

South Korea is expected to start selling a $6 billion majority stake in the country's largest financial company, Woori Finance Holdings, in a move that could create a Korean bank with the heft to compete on the global stage, Dow Jones Daily Bankruptcy Review reported. A successful sale of Woori, which was cobbled together in 2001 in the wake of the Asian financial crisis as a holding company for several troubled financial firms, would be a significant step for the government of President Lee Myung-bak, which wants to privatize more of an economy that retains significant state ownership.

Credit card firms have seen their loan services gaining popularity among users thanks to less stringent processes, The Korea Times reported. However, the easier-to-use system may produce bad loans both to the detriment of users and the card firms. According to the Financial Supervisory Service (FSS), the amount of lending by credit card companies reached 14.1 trillion won as of the end of August, up 23.7 percent from the end of last year, surpassing cash advance services by banks at 12.5 trillion won, which saw a rise of 3.3 percent during the cited period.

More than one third of listed companies earn less than the interest they have to pay on outstanding debts, a state researcher claimed Thursday, The Korea Times reported. Lee Ji-eon, a researcher at the Korea Institute of Finance, claimed that 561 listed firms ― 36 percent of all the listed companies ― marked an interest coverage ratio below 100 percent in 2008 ― skyrocketing from 24 percent in 2004. An interest coverage ratio below 100 percent suggests that the company’s profit isn’t enough to meet interest payment obligations.