Jungjingong Captures 'Golden Time' for Crisis Companies with Proactive Structural Improvement

Collaborating with Financial Institutions to Establish Restructuring Plans and Provide Financial Support
Supported 1.5 Billion KRW for 15 Companies in Last Year's Pilot Operation... Expanding Significantly to 25 Billion KRW This Year

[Asia Economy Reporter Kim Cheol-hyun] The Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 1st that it will actively promote a proactive autonomous restructuring program and provide 25 billion KRW in policy funds (funds exclusively for restructuring) to secure the golden time for small and medium-sized venture companies in management crisis whose financial soundness has deteriorated due to the prolonged COVID-19 pandemic and continued economic recession.

The proactive autonomous restructuring program is a project in which SBC and partner banks proactively support small and medium-sized venture companies in management crisis with costs for establishing restructuring plans, new loans, and extensions of existing loan maturities before bankruptcy or rehabilitation, providing companies with an opportunity to independently implement management normalization programs.

Through a pilot operation in the second half of last year, SBC signed a business agreement with Industrial Bank of Korea and established a cooperative foundation with financial institutions for SME restructuring, supporting 5.5 billion KRW in funds including new liquidity supply, maturity extensions, and interest rate reductions to 15 companies.

This year, SBC will officially launch the 'Restructuring Center' and expand the fund size to 25 billion KRW to begin full-scale support. It plans to establish restructuring plans and provide new funds to about 50 crisis SMEs.

In addition, the scope of partner banks will be expanded from policy banks to commercial banks, and additional regional collaborative accounting firms will be secured to build a foundation for resolving various financial difficulties of SMEs. Besides existing financial support such as new loans or maturity extensions, diversification of support methods will be pursued to enhance the effectiveness of restructuring support.

SMEs wishing to participate in the proactive autonomous restructuring program can apply for consultation through the 18 SBC Comprehensive Rechallenge Support Centers nationwide. Chairman Kim Hak-do said, "The proactive autonomous restructuring program is a model that helps strengthen corporate competitiveness by supporting the establishment of restructuring plans and rapid liquidity supply for SMEs in management crisis," adding, "SBC will support early management normalization by providing customized restructuring support to SMEs vulnerable to changes in the economic environment based on cooperation with financial institutions."