Anchor: South Korean financial authorities have designated 32 cash-strapped conglomerates that need to seek a voluntary workout program or be placed under court receivership. The list included not only companies in fragile industries such as shipbuilding and shipping, but also some electronics firms.
Our Moon Gwang-lip has more.
 
Report: A total of 32 large-sized companies are subject to this year’s corporate restructuring schemes that will be overseen by the government.

The 2016 list of local firms was announced on Sunday by the Financial Supervisory Service(FSS) after it analyzed the credit risks of companies which owed more than 50 billion won to banks.  

Thirteen of them were put in category C and will be required to pursue a debt rescheduling program with their creditors, while the other 19 companies were classified as category D, under which they will go into court receivership.

According to the financial watchdog, the 32 companies put on the list borrowed a total of 19-point-five trillion won from banks, which was nearly three times the total amount of bank loans owed by companies selected last year as corporate restructuring subjects.

The colossal jump was attributed to companies on the fresh list that are currently under corporate restructuring, such as STX Offshore and Shipbuilding Company and Hyundai Merchant Marine.

Among the country’s five most vulnerable industries, shipbuilding and shipping fared the worst, producing six companies on the list, compared with only one last year.

On the contrary, the number of construction companies included on the list fell to a quarter of last year's level, thanks to the recovery of the local real estate market.

The electronics industry had long remained free from state corporate restructuring schemes, but this time, as many as five companies in the industry were designated as needing some form of restructuring.

In particular, small component suppliers for semiconductors and display products were hit hard.
 
Shinhan Investment Corp. researcher Kim Sang-hun explained that while large-sized local electronics companies are posting solid performances, their subcontractors, such as suppliers of components, are posting gloomy sales records than last year.

Diminishing demand in China for electronics products was also mentioned to be worsening the small electronic suppliers’ problems.
 
In response, the financial authorities plan to intensively monitor the local electronics industry in the second half of the year. 
Moon Gwang-lip, KBS World Radio News.