Korea Resources Corporation, Credit Rating Outlook 'Stable → Negative'... Moody's "Integration Uncertain Within 12 Months"

Perspective view of the new headquarters of Korea Mineral Resources Corporation. (Photo by Korea Mineral Resources Corporation)

[Asia Economy Reporter Moon Chaeseok] On the 21st, international credit rating agency Moody's downgraded the credit rating outlook of Korea Resources Corporation from 'Stable' to 'Negative.'

Yoo Wanhee, Vice President and Senior Credit Officer at Moody's, stated, "We considered the delay in the passage of the bill in the National Assembly to merge Korea Resources Corporation and Korea Mine Reclamation Corporation, as well as the resulting uncertainties," in making this assessment.

Vice President Yoo explained, "The Korean government has a strong will to integrate the two institutions, but it is uncertain whether the bill will pass in the National Assembly within 12 months. If the delay continues for a long time, it will not only negatively affect the possibility of improving the weak financial soundness of Korea Resources Corporation but also raise concerns about the timeliness of government support."

He added, "Considering the low likelihood that the government would tolerate the risk of Korea Resources Corporation defaulting on its debt and the government's strict management and supervision, the possibility of government support is very high," maintaining the corporate credit rating and unsecured bond credit rating at 'A1.'

Earlier, in November 2018, Hong Youngpyo, a member of the Democratic Party of Korea, and others proposed the Korea Mining Corporation Act to establish the 'Korea Mining Corporation' by merging Korea Resources Corporation and Korea Mine Reclamation Corporation. However, the bill has not passed due to opposition from the Korea Mine Reclamation Corporation labor union and disagreements within the National Assembly.

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