Priority Support from the Industrial Fund for Airlines and Other Key Industries with Debt Exceeding 500 Billion Won

4th Emergency Economic Central Disaster and Safety Countermeasure Headquarters Meeting

Launch of Corporate Bonds and CP Purchase Vehicle with a Scale of 10 Trillion KRW

550,000+ Direct Jobs, 3.5 Trillion KRW Supplementary Budget Investment

Condition to Maintain Over 90% Employment for 6 Months

Deputy Prime Minister Hong: "Reflected in Early June Mid-Year Economic Policy Plan"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the 4th Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office Building on the 20th.

[Sejong=Asia Economy Reporters Kwangho Lee, Sangdon Joo] The government will operate a 40 trillion KRW scale Period Industry Stabilization Fund starting in June. The target companies are those in industries such as aviation and shipping with borrowings of 500 billion KRW or more, 300 or more employees, and that have been affected by the COVID-19 pandemic. Additionally, a special purpose vehicle (SPV) for purchasing low-credit rating corporate bonds and commercial papers (CP) will be launched first with a scale of 10 trillion KRW. Furthermore, to overcome the job crisis caused by COVID-19, an additional supplementary budget of 3.5 trillion KRW will be invested in the public sector direct job creation project of "550,000+α" jobs.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki announced these plans at the 4th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting held at the Government Seoul Office on the 20th. Regarding the operation plan of the 40 trillion KRW Period Industry Stabilization Fund, he said, "We will support the Period Industry Stabilization Fund to companies in target industries such as aviation and shipping with total borrowings of 500 billion KRW or more, 300 or more employees, and that have been affected by COVID-19 + α (some exceptional additional targets)."

The operation plan for the Period Industry Stabilization Fund also includes support for partner companies. Deputy Prime Minister Hong stated, "We will provide funds in various ways suitable to the corporate conditions such as liquidity support and capital expansion, and will also take measures to allow the introduction of a 'Partner Company Support Specialized Program' utilizing the fund within a range of 1 trillion KRW to support partner companies of period industry firms."

The government imposed a condition on supported companies to maintain at least 90% of their workforce for six months from the start date of fund support. Ten percent of the total support amount will be provided in stock-linked securities, and measures to prevent moral hazard such as restrictions on dividends and treasury stock acquisition are included. The government plans to prepare so that actual support can begin in June.

The SPV, established through investment by the government and the Korea Development Bank and loans from the Bank of Korea, will purchase not only high-grade bonds but also non-investment grade bonds and CP. Conditions such as purchase limits on the same company and corporate groups will be imposed to prevent concentration of support on specific companies. The government and the Bank of Korea will operate the SPV temporarily for six months, then decide on extension based on market stabilization, and will consider expanding the scale up to 20 trillion KRW if necessary depending on the COVID-19 situation.

Regarding the public sector direct job creation measures to respond to employment shocks, Deputy Prime Minister Hong mentioned, "We will promptly execute the 550,000+α direct job project in the public sector immediately after securing supplementary budget resources of 3.5 trillion KRW." The tourism domestic market early revitalization plan discussed at the meeting is expected to be finalized and announced next week after supplementation. It is anticipated to include measures to convert overseas demand to domestic tourism and mid-term plans for recovery of the foreign visitor tourism market after the COVID-19 pandemic.

Deputy Prime Minister Hong stated on the day, "The fundamental solution to jobs is the maintenance and creation of jobs in the private sector," and added, "We will mobilize all means including fiscal, tax, and financial support, regulatory reform, and improvement of investment environment, and reflect these measures in the Mid-Year Economic Policy Direction plan to be finalized and announced in early June."

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