Financial Services Commission: "Special Guarantees for Auto Parts Companies to Operate on Weekdays... Additional Key Industries to Be Designated on Weekdays"

Son Byung-du, Vice Chairman of the Financial Services Commission / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Hyo-jin] Sohn Byung-doo, Vice Chairman of the Financial Services Commission, stated on the 7th regarding the 'Win-Win Special Guarantee Package Program' by finished car manufacturers and the Korea Credit Guarantee Fund for automobile parts suppliers, "Since 10 billion won in funding has been secured through the supplementary budget, it is scheduled to be operational within this week."

Vice Chairman Sohn announced this plan at the 'Financial Risk Response Team Meeting' held at the Korea Federation of Banks in Jung-gu, Seoul, on the morning of the same day.

Regarding the 'Operating Fund Support Program for Key Industry Cooperative Companies,' Sohn said, "We are discussing detailed operational plans through a task force involving the government, the Key Industry Stabilization Fund, and the banking sector," adding, "We will prepare to promptly activate the program this week by designating additional eligible industries beyond the existing aviation and shipping sectors."

The financial authorities are strengthening support capacity for low-credit rating companies and companies facing difficulties in forming asset sale markets. Vice Chairman Sohn stated, "With the supplementary budget passed, 1 trillion won in government equity has been secured for the low-credit rating corporate bond and commercial paper (CP) purchase institution. We will promptly proceed with related procedures together with relevant organizations such as the Bank of Korea and the Korea Development Bank to establish a special purpose vehicle (SPV) by July and begin support for non-investment grade bond issuing companies."

For the 'Corporate Asset Sale Support Program,' the Financial Services Commission plans to start formal applications in mid-June based on the 50 billion won equity reflected in the supplementary budget.

Meanwhile, the Financial Services Commission reported that from February 7 to June 3, a total of 1,738,000 cases and 152.7 trillion won in financial support were provided across the entire financial sector to small and medium-sized enterprises and small business owners affected by the novel coronavirus disease (COVID-19).

By type, 73 trillion won was supplied through new loans and guarantees, and 79.7 trillion won through extensions of existing loans and guarantees. By institution, policy financial institutions supported 79 trillion won, and commercial banks supported 72.8 trillion won.