Asia Times: Creditors find $30bn of Daewoo 'assets' useless



	October 29, 1999	atimes.com

The Koreas

Creditors find $30bn of Daewoo 'assets' useless

SEOUL - With their audit on 12 Daewoo Group companies nearly over, creditor banks have discovered that over 35 trillion won ($30 billion) worth of assets is useless. More than 33 trillion won in lost asset value came from five key units - Daewoo Corp, Daewoo Motor, Daewoo Electronics, Daewoo Heavy Industries and Daewoo Telecom - with the difference between auditors' estimates and figures in Daewoo Corp's ledgers reaching 59 percent.

In the ledgers, Daewoo Corp's assets totaled 28.9 trillion won, but the audit found just 11.8 trillion won and debts of 26.3 trillion won. There was a 31.6 percent difference between the books and the creditors for Daewwo Telecoms assets in August. The audit found that assets totaled only 2.25 trillion won, while debts reached 3.18 trillion won. Daewoo Electronics said its assets were 8.2 trillion won, but the banks' evaluation found just 2.5 trillion won. Daewoo Motor's ledger assets of 21 trilion won were reduced to 13 trillion won. Those those of Daewoo Heavy Industries were reduced from 13.2 trillion won to 9.2 trillion won. Creditors expect more losses because the value of the group's overseas assets remain unstable.

Auditors and creditors suggest several reasons for the bad assets: the conglomerate has been having trouble in its overseas operations and in collecting credit export payments, and its stock value has tumbled at home and abroad since its devastating financial state was exposed.

Creditors will be mapping out debt workout programs over the next week to help Daewoo companies with the debts, but they may have to drop a few workout targets from the list due to these latest findings. Some of the 12 Daewoo companies may not receive creditors' support if their future value is deemed unworthy.

(Asia Pulse/Yonhap)

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