Ministry of Industry to Promote Business Restructuring for 100 Companies This Year for Digital and Green Transition
[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has approved business restructuring plans for 16 companies in new business sectors, including future vehicles, to foster new growth engines in the industrial sector. The government plans to promote business restructuring for 100 companies this year to activate digital and green transitions.
On the 11th, the Ministry of Trade, Industry and Energy held the 29th Business Restructuring Plan Deliberation Committee meeting at the Coal Hall and approved the business restructuring plans of a total of 16 companies.
The government has been operating the business restructuring system under the Corporate Vitality Act since 2016 to support proactive and voluntary business restructuring by normal companies and prevent enormous costs resulting from ex-post restructuring. Over the past five years, a total of 166 companies have received approval for business restructuring. Approved companies receive various incentives in areas such as simplified procedures under the Commercial Act and the Fair Trade Act, regulatory exemptions, finance, taxation, employment, and research and development (R&D) on the condition that they pursue structural changes and business innovation.
Among the 16 companies approved for business restructuring this day, 14 are from the internal combustion engine vehicle industry. Notably, for the first time in the automotive industry, four joint business restructuring cases involving both purchasing companies and supplying companies were approved. These include Yuratek, Sambo Motors, NTM, and GMB Korea. By applying for business restructuring from internal combustion vehicles to future vehicles such as hydrogen and electric cars, the Ministry of Industry expects the innovation of Korea’s automotive industry aiming for digital and green transitions to accelerate further. The 16 companies plan to invest a total of 400 billion KRW in promising new industries such as future vehicles and hire 12,000 new employees over the next five years.
An official from the Ministry of Industry stated, "We will actively support digital and green transition business restructuring and revitalize the joint business restructuring system where purchasing companies and supplying companies share and reduce business restructuring risks together. Through the refinement of business restructuring incentives and active promotional activities in the industrial sector, we plan to focus on promoting business restructuring for 100 companies this year."
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