Minister of Industry Visits Steel Companies to Announce Timely Support for Corporate Bond P-CBOs

Company Chairman: "Active Extension of Financial Sector Maturities and Expansion of Financial Support for Mid-sized Companies Needed"
Sung Yoon-mo: "Full Effort to Protect Industrial Base Including Mid-sized Industry... Timely Use of New Financial Support"

Sung Yun-mo, Minister of Trade, Industry and Energy./Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Moon Chaeseok] "The government will also actively strive to ensure that mid-sized companies struggling due to the novel coronavirus infection (COVID-19) can timely utilize instruments such as P-CBOs (Bond Collateralized Securities)."

On the 16th, Sung Yoon-mo, Minister of Trade, Industry and Energy, visited Gibosteel, a mid-sized steel processing company located in Siheung City, Gyeonggi Province's Sihwa Industrial Complex, and stated that liquidity support would be firmly provided.

P-CBO refers to a system where the Korea Credit Guarantee Fund provides guarantees to companies with low credit ratings to help them issue corporate bonds.

Both the government and companies agreed that overcoming the 'liquidity crisis' is urgent. Choi Seung-wook, Chairman of Gibosteel, requested, "Due to decreased sales, we are facing difficulties in cash liquidity, so active extension of loan maturities by financial institutions and expanded financial support for mid-sized companies are necessary."

Minister Sung emphasized, "The government will also actively strive to ensure that mid-sized companies struggling due to COVID-19 can timely utilize new financial support programs such as P-CBOs prepared by policy financial institutions. We will continuously listen to companies' financial difficulties and closely communicate and consult with financial authorities to make every effort to prevent the industrial base, including mid-sized industries, from being damaged by COVID-19."

He also said that efforts would be made to improve corporate structures after COVID-19. Chairman Choi said, "We are trying to diversify product lines and secure new business partners to overcome sales decline and increased inventory costs caused by the worsening slump in steel-related industries such as automobiles and machinery due to the COVID-19 crisis."

In response, Minister Sung said, "To resolve the fundamental difficulties faced by the steel industry, we will actively support proactive business restructuring and strengthening competitiveness in preparation for demand expansion after COVID-19."

He also reaffirmed the commitment to realize previously announced policies to foster the materials, parts, and equipment sector. Minister Sung stated that more than 50 promising mid-sized companies in the materials, parts, and equipment sector will be nurtured into global specialized companies.

He reconfirmed that by the end of this year, the private burden ratio for mid-sized companies will be reduced from a maximum of 50% to 35%, and the cash portion will be lowered from a maximum of 50% to 10%. This was announced at the 4th Emergency Economic Meeting.

He also pledged to faithfully implement the '2nd Basic Plan for Growth Promotion of Mid-sized Companies,' established and announced in February. The plan includes establishing the 'Korea-Germany Materials and Parts Technology Cooperation Center' and improving industrial R&D systems for mid-sized companies.

However, the Korea-Germany Center will begin full operation after the COVID-19 situation stabilizes in Germany.

This content was produced with the assistance of AI translation services.