S. Korea's conglomerates face increasing debts amid economic downturn

Special Report:Global Financial Crisis

SEOUL, March 6 (Chinese media) -- The debt-to-equity ratio of South Korea's big

conglomerates hit over 100 percent for the first time in five years in 2008,

South Korea's Korea Herald said Friday.

The data came as South Korean big conglomerates raised money from bank

loans and bond issuance so as to secure cash amid the global credit crunch.

According to data from chaebul.com, a conglomerate information provide, the

top 10 conglomerates of the nation marked an average debt ratio of 101.9 percent

as of the end of 2008, up 20 percentage points from 84.3 percent at the end of

2007.

The ratio hit the highest level in 2008 after the figure hit 119.2 percent

at the end of 2003.

During the 1997-98 Asian financial crisis, the debt-to-equity ratio for the

top 10 conglomerates exceeded 300 percent, which gradually stabilized to below

100 percent by the end of 2004.

Faced with a prolonged economic downturn, top 10 groups are rushing out to

secure cash. As a result, bond issuance and bank loans are on a rapid rise, Lee

Young-gon, an analyst at Hana Daetoo Securities, told local daily newspaper the

Korea Herald.

He expected companies will enhance efforts to secure cash as their

financial health is expected to make a further decline down the road.