Hong Nam-ki: "2 Trillion Won + α Financial Support for Car Parts Partner Companies" (Update)

"5 Trillion Won Operating Fund Loans for Period Industry Partners Starting July"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the 7th Emergency Economic Central Countermeasures Headquarters meeting held on the 19th at the Government Seoul Office in Gwanghwamun, Seoul.

[Asia Economy Reporter Kwangho Lee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the 19th, "We will promote financial support worth 2 trillion won + α through guarantees, loans, and maturity extensions for vulnerable partner companies with medium to low credit ratings."

Deputy Prime Minister Hong presided over the 7th Emergency Economic Central Countermeasures Headquarters (Economic Central Headquarters) meeting held at the Government Seoul Office and stated, "This is an additional measure following the support measures for the automobile parts industry (5 billion won in mutual growth special support) announced at the 5th Economic Central Headquarters."

Deputy Prime Minister Hong emphasized, "Regarding guarantees, the central government, local governments, and completed car companies will join forces to establish a special guarantee program worth 270 billion won, and we plan to operate a 30 billion won 'project joint guarantee system' for future vehicles, etc."

He continued, "Regarding loans, we will also promote a 350 billion won mutual growth fund program, overseas asset-backed loans for overseas local subsidiaries, 300 billion won in accounts receivable secured loans from completed car companies to first-tier partner companies, and 1 trillion won in support regardless of credit rating using the Industrial Bank of Korea's 'Cheer Up Korea' special funds."

Furthermore, he added, "Through the participation of policy financial institutions and the five major commercial banks?Shinhan, Woori, Kookmin, Nonghyup, and Hana Bank?we will extend the maturity of existing loans and guarantees for mid-sized partner companies by up to one year in bulk."

Deputy Prime Minister Hong also mentioned, "We plan to supply operating fund loans totaling 5 trillion won starting in July for partner companies in key industries."

Although the government is providing liquidity and other support through a 175 trillion won + α scale livelihood finance stabilization package, partner companies face significant restrictions in accessing finance due to low credit ratings, leading to the concretization of a fund support program specialized for partner companies.

Deputy Prime Minister Hong explained, "This program is a method where a special purpose vehicle (SPV), established with a 1 trillion won investment from the Industrial Infrastructure Fund, purchases and securitizes (issues P-CLOs) partner company loan receivables from commercial banks."

He added, "It is an operating fund support loan for partner companies experiencing financial difficulties, and especially since it grants additional loan limits beyond the existing loan limits, it is expected to be of practical help."

Regarding measures to facilitate the movement of businesspeople and export logistics, Deputy Prime Minister Hong stated, "To support the movement of businesspeople, we will expand the so-called fast-track system, i.e., entry exemption system introduced between Korea and China, to Vietnam, Singapore, the United Arab Emirates (UAE), and others," and "We will also promote exemption from self-quarantine upon return after short-term business trips to countries with low transmission risk."

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