Korea Development Bank (KDB) said on the 25th it will draw up financial support measures needed to proceed with "Daesan No. 1," the first business restructuring project in the petrochemical industry.
On this day, Korea Development Bank (KDB) held a meeting of creditor financial institutions under the structural innovation support agreement to discuss a plan to integrate the Daesan plants of HD Hyundai Chemical and Lotte Chemical. The meeting discussed a review of the feasibility of the business restructuring plan and financial support measures to carry out the plan.
Earlier, HD Hyundai Chemical and Lotte Chemical submitted a business restructuring plan to the Ministry of Trade and Industry (MOTI) in Nov. last year, and an external professional institution conducted due diligence. As a result, it was concluded that securing liquidity and financial stability is necessary to operate the joint integration plan of the two companies. In response, the government is moving to provide financial support, led by Korea Development Bank (KDB).
As support measures for the joint integration of the two companies, the government will provide: ▲ financial support to secure investment and financial capacity ▲ tax burden relief ▲ regulatory easing accompanying business restructuring such as partitioning and mergers ▲ support for reducing costs such as utilities ▲ expansion of regional economic and employment safety nets ▲ R&D support.
In addition, financial institutions holding the two companies' bonds agreed to defer repayment of the existing 7.9 trillion won in bonds and to provide up to 1 trillion won in new funds.
After the meeting, Korea Development Bank (KDB) plans to submit a second agenda item on financial support measures to the voluntary councils formed for each company. If at least three-fourths based on the total amount of claims agree, the measure will be approved and implemented.