Mutual Investment Restriction Corporate Group Debt Guarantees Decreased by 62.3% Compared to Last Year

The Fair Trade Commission announced on the 12th that the total debt guarantee amount of large conglomerates with assets exceeding 10 trillion won decreased by 62.3% compared to last year.

The Fair Trade Commission released the "2023 Status of Increase and Decrease in Debt Guarantees of Mutual Investment Restriction Corporate Groups" containing this information. Mutual investment restriction corporate groups are conglomerates among publicly disclosed corporate groups with total assets of 10 trillion won or more, and as of May this year, there are 48 such groups.

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Among them, 9 mutual investment restriction corporate groups had debt guarantee amounts, totaling 420.5 billion won. Compared to the 1.115 trillion won in debt guarantees held by 10 such groups last year, this represents a 62.3% decrease. The increase or decrease in debt guarantee amounts is determined by the financial status of newly designated mutual investment restriction corporate groups, and the Fair Trade Commission explained that the overall debt guarantee amount decreased because the debt guarantee amounts of newly designated groups this year were relatively small.

This year, the restricted debt guarantee amount was 263.6 billion won, a decrease of 72.7% (700.5 billion won) from last year. The exempted debt guarantee amount was 156.9 billion won, an increase of 4.0% (6 billion won) from last year. Most of the restricted debt guarantees were made to strengthen the credit for business fund procurement of affiliates. They were expected to be fully resolved within the grace period (2 years). The exempted debt guarantees were found to correspond to cases necessary for strengthening corporate international competitiveness, such as social overhead capital or overseas construction.

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