The Financial Services Commission announced on the 3rd that it has prepared a financial support plan worth about 1 trillion won to help companies that are pursuing business restructuring recover their competitiveness and advance into new industries.
The government decided to support preemptive corporate restructuring in order to enhance corporate competitiveness in consideration of the accelerating environmental changes such as digital transformation and carbon neutrality in the course of responding to COVID-19. This is according to the point that it was difficult to link financial support to companies approved for business reorganization because the current standards for approval of business reorganization by the Ministry of Industry and Financial Institutions were different.
The Financial Services Commission is planning to provide 220 billion won in support by establishing a new fund targeting business restructuring companies as the main investment target. The ‘Business Reorganization Innovation Fund’ centered on the Korea Institute for Advancement of Technology (KIAT) will be created at 75 billion won and the ‘Business Restructuring Fund’ centered on IBK will be set up at 145 billion won to invest in companies promoting business restructuring.
While providing financial support of more than 700 billion won by providing exclusive loan and guarantee products that provide preferential interest rates to companies undergoing business reorganization, it is also possible to sell assets owned by companies approved for business reorganization to the Korea Asset Management Corporation and then lease them. The plan is to provide liquidity.
An official from the Financial Services Commission said, “From September, the business reorganization support center will check the financial situation of the applicant company and determine whether the reason for disqualification is applicable. Through this, we plan to evaluate the feasibility of entering a new business and the ability to expand capital,” he said.
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