South Korea: 25 percent of Small- and Mid-Sized Shipbuilders Likely to Receive C or D Grades

Among the group of 70 construction companies and 4 shipbuilders subjected to receive evaluations for the second round of restructuring, around 20 companies are expected to undergo a workout process or be liquidated from the industry. The figure accounts for nearly 25 percent of the group, indicating that creditors are imposing stricter standards compared to the first round of restructuring process where only 14 percent of the evaluated group received C or D grades.
The banking circle is currently in the process of the credit risk evaluation, planning to finalize the process as early as March 24.
Nonghyup Bank dealing with 15 prime creditor banks is conveyed to give out C or D grades to at least 4 to 5 companies. The bank is expected to go harsh on companies this time as it faced severe criticisms for conducting an unreliable evaluation on Sinchang Construction Co. Ltd., which applied for a legal management even after receiving B grade from Nonghyup Bank in the first round of restructuring process. To this end, an increasing number of companies are inevitably subjected to receive C or D grade in the final round.