Korean companies reportedly catching eurozone drag
By Kim Yon-se ,The Korea Herald/Asia News Network
July 10, 2012, 12:41 am TWN
SEOUL -- More and more local enterprises are actively liquidating their assets to secure cash as much as possible, as economic uncertainties drag on from the eurozone debt crisis.
According to the Financial Supervisory Service, the amount of assets Korean firms sold during the first half nearly doubled from the previous year.
The regulatory data showed that local firms sold a total of 780.7 billion won (US$690 million) worth of tangible assets in the six-month period, compared with 404.8 billion won over the same period last year.
Firms are required to disclose sales of assets that exceed a certain portion of their total assets.
Hite Jinro Co., the nation's No. 2 beer producer, recently sold one of its office buildings for 134 billion won in an attempt to improve its financial standing.
SK Networks, a unit of SK Group, is reportedly considering selling its office buildings for 150 billion won to 180 billion won.
Solomon Savings Bank sold two office buildings in southern Seoul for a total of 158.4 billion won in March. Under the FSS' guidance, the debt-saddled secondary bank has been trying to normalize its operations.
Analysts say their asset sales movement comes as local companies are stepping up efforts to beef up their liquidity amid concerns over slowing global growth and the eurozone fiscal woes.
The Korea Development Institute said Sunday that "uncertainties still prevail in the local economy, although the downside risk trend has slowed, aided by increased production in the services and mining industries in recent months."
Private consumption rebounded, with demand for durables surging, the state-controlled research center said in a monthly report.
The consumer sentiment index fell to 101 in June from 105 in May due to the growing uncertainties in the domestic and global economies, the report said.
Investment in facilities and construction continued to be sluggish in May, while the country witnessed a US$4.96 billion trade surplus in June, according to the report.
Last month, the Finance Ministry revised its GDP growth projection for this year to 3.3 percent from an earlier 3.7 percent, citing the critical situation in Europe.