Government Steps Up Financial Support for Petrochemical Industry: "Support Comes After Painful Self-Rescue Efforts" (Comprehensive)

Kwon Daeyoung, Vice Chairman of the Financial Services Commission
At the Petrochemical Industry Restructuring Meeting
"It's like trying to save someone from drowning, but they're asking for your bundle first"
Firm Principle: Financial Support Only After Strong Self-Rescue Efforts
Requests Financial Institutions to Refrain from Recalling Existing Loans Until Restructuring Plans Are Finalized

As the government announced its policy to restructure the petrochemical industry, financial authorities and the banking sector have pledged financial support. However, they attached the prerequisite that petrochemical companies must first make strong self-rescue efforts.

Kwon Daeyoung, Vice Chairman of the Financial Services Commission, attended the 'Meeting for Petrochemical Industry Restructuring' held at the Korea Federation of Banks in Jung-gu, Seoul, on the morning of the 21st, where he urged the petrochemical industry to make thorough self-rescue efforts. After delivering his opening remarks before the meeting began, he continued with additional, unscheduled comments. Vice Chairman Kwon said, "Yesterday, I saw the Ministry of Industry's plan to reduce (petrochemical facilities), and it finally wrapped up something that had been dragging on for a year," but added, "There are considerable complaints coming from the petrochemical industry."

He went on to say, "In my view, it's like trying to save someone from drowning, but they're asking for your bundle first," and emphasized, "The government expresses regret over such complacent attitudes." He stated that only after petrochemical companies make self-rescue efforts can creditors cooperate and the restructuring of the petrochemical industry proceed in an orderly manner.

Kwon Daeyoung, Vice Chairman of the Financial Services Commission, is delivering opening remarks at the 'Petrochemical Industry Restructuring Finance Sector Meeting' held at the Korea Federation of Banks in Jung-gu, Seoul on the 21st. 2025.08.21 Photo by Yoon Dongjoo

This meeting was held as a follow-up to the previous day's 'Ministerial Meeting on Strengthening Industrial Competitiveness' and was organized to share the current status of the petrochemical industry and the direction of industry restructuring, as well as to discuss the principles of financial support, in light of the signing of the 'Voluntary Agreement on Petrochemical Industry Restructuring.' Attendees included Vice Chairman Kwon, the Deputy Governor of the Financial Supervisory Service, NICE Credit Rating, BCG Consulting, the Korea Federation of Banks, the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), Korea Development Bank, IBK Industrial Bank, Export-Import Bank of Korea, Korea Credit Guarantee Fund, Korea Technology Finance Corporation, Korea Trade Insurance Corporation, and Korea Asset Management Corporation.

Vice Chairman Kwon presented three basic principles for restructuring: thorough self-rescue efforts, sharing of pain, and swift execution. He stressed that, in order to gain the trust of the market and achieve successful restructuring, petrochemical companies must demonstrate 'action' based on principles, including drastic self-rescue efforts and concrete, reasonable restructuring plans.

Regarding the financial sector, he stated that it should rigorously evaluate companies' self-rescue efforts and play the role of observer and supporter to ensure reasonable plans are developed. He also requested that, until restructuring plans are finalized, financial institutions refrain from actions such as recalling existing loans, likening such behavior to "taking away the umbrella when it rains."

Financial institutions agreed that, on the premise of thorough self-rescue efforts and responsibility by companies and major shareholders, they would provide support through a joint agreement among creditor financial institutions if the restructuring plans are deemed reasonable. When companies receive financial support under the agreement, the principle will be to maintain existing credit lines, but the specific details and levels of support will be determined through discussions between the companies and creditor financial institutions during the process of developing the restructuring plans.

In his opening remarks, Vice Chairman Kwon said, "The petrochemical industry is a key industry that forms the foundation of our country's industrial competitiveness and is not one we can afford to abandon," but added, "We can no longer delay the necessary surgery." He went on to state, "We must begin a restructuring process in which everyone participates."

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