First press briefing since taking office
KDB to shoulder half of the 1 trillion won in new funds for the "Daesan No. 1" project
HMM sale "Not under review for now... Busan relocation comes first"
Park Sangjin, chairman of the Korea Development Bank (KDB), said on the 25th that in relation to the integration of HD Hyundai Chemical and Lotte Chemical's Daesan plants, which is the first case of "business restructuring in the petrochemical industry," KDB will take charge of 430 billion won out of the 1 trillion won in new funding, which is close to half of the total. He added, "If the creditors insist only on their own interests, it will lead to a situation of mutual ruin." Regarding the sale of HMM, he confirmed the position that the sale will be pursued after the relocation of the head office to Busan is completed.
Park Sangjin, chairman of the Korea Development Bank (KDB), is speaking at his first press briefing since taking office at the bank's head office in Yeouido, Seoul, on the 25th. Photo provided by Korea Development Bank.
At his first press briefing since taking office, held at the KDB headquarters in Yeouido, Seoul, on this day, Chairman Park requested cooperation from the creditor group regarding financial support for the consolidation and closure of the Daesan plants, which is being promoted as the first case of "petrochemical restructuring." He said, "The petrochemical industry is a key national industry and an upstream industry. If the upstream industry collapses, downstream industries can also suffer, so I do not believe the creditor group will consider only its own interests."
He went on to address the possibility that some creditors might raise objections at the creditors' financial institutions council scheduled for this afternoon, saying, "Not every financial institution will agree," but stressing, "I hope the creditor group will cooperate, and I believe they will."
The government on this day approved a customized support package totaling 2.1 trillion won, including finance, tax benefits, and permits and approvals, to support the first Daesan restructuring project. Of this, approximately 2 trillion won in financial support is the core.
Chairman Park said, "We plan to provide up to 1 trillion won in new funding so that the integrated HD Hyundai Chemical can smoothly carry out investments related to the restructuring," adding, "Of that, KDB will exclusively handle 430 billion won in funds for facility investment and research and development (R&D) for business structure conversion." By making it clear that KDB will shoulder roughly half of the new funding directly, he called for active cooperation from the creditors.
He added, "We are also pursuing a plan to convert up to 1 trillion won of the creditors' loans into perpetual bonds so that the company can improve its financial structure and raise its own funds at an early stage." Although the burden ratio by financial institution resulting from the conversion into perpetual bonds has not yet been decided, he said, "I believe it should be borne in proportion to the equal ratio of bonds," and explained, "Since the purpose is to help the integrated HD Hyundai Chemical recover so that the creditors' claims do not become non-performing, the creditor group will come up with a good plan through consultation."
Chairman Park also stated his position on pending issues related to the sale of HMM and KDB Life Insurance on this day.
On the sale of HMM, he drew a line by saying, "We are not reviewing it right now," indicating that it is not an urgent issue. He said, "In the case of HMM, relocation to Busan is the priority task," and explained that the Korea Ocean Business Corporation and the Ministry of Oceans and Fisheries have presented a schedule to hold a general meeting of shareholders between March and April to complete the relocation to Busan. He added, "After the relocation to Busan is completed, we will need to discuss a desirable direction for development in consultation with the Korea Ocean Business Corporation and the Ministry of Oceans and Fisheries."
Regarding KDB Life Insurance, he confirmed the position that normalizing management through measures such as recruiting outside professional managers and securing sales channels takes precedence over a sale.
Chairman Park also emphasized his commitment, as the head of a policy bank, to do his utmost to foster industries and companies through the speedy operation of the National Growth Fund and the launch of the "KDB Next Korea" program, which will total 250 trillion won over the next five years.
Chairman Park said, "We have approved the Shinan Ui offshore wind power generation project, with a total project cost of 3.4 trillion won, as the first project of the National Growth Fund, and the second and third projects are also scheduled to be reviewed soon," adding, "We will push our work forward swiftly so that we can achieve the 30 trillion won approval target for the National Growth Fund for 2026 ahead of schedule and deliver results beyond that."
The total 250 trillion won support plan to be injected into the KDB Next Korea program is specified as 100 trillion won to strengthen the competitiveness of advanced strategic industries, 75 trillion won to expand regional finance, 50 trillion won to promote industrial balance, and 25 trillion won for loans and investments linked to the National Growth Fund.
In addition, to revitalize regional finance, KDB will push to supply 30 trillion won in funds to non-capital regions this year and, as part of this effort, will expand and reorganize special preferential regional products from 10 trillion won last year to 15 trillion won this year.
Chairman Park stressed, "We will expand venture investment and increase lending to high-tech industries through the National Growth Fund," adding, "Through this, we will grow the industrial pie and enhance competitiveness so that our companies can survive in the global market."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
