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The Korea Herald
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THE INVESTOR
March 29, 2024

Industrials

Over 160 chaebol units suffer from capital erosion

  • PUBLISHED :June 17, 2018 - 13:46
  • UPDATED :June 17, 2018 - 13:46
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[THE INVESETOR] More than 160 units of Korea‘s major conglomerates suffer from capital erosion due to continued losses, a corporate tracker said June 17.

A total of 162 companies belonging to the country’s 60 largest conglomerates by assets, known as chaebol, had negative capital as of 2017, accounting for 7.8 percent of their combined 2,083 subsidiaries, according to Chaebul.com.




GM Korea Group posted the highest percentage -- 50 percent -- as one of its two subsidiaries suffered from capital erosion. GM Korea, the Korean unit of General Motors, had 7.5 trillion won (US$6.8 billion) in liabilities last year, compared to assets of 6.4 trillion won. The carmaker logged an operating loss of 854.2 billion won due to sluggish sales last year.

Netmarble Group, which has Korea‘s top mobile game developer Netmarble Games under its wing, came next with 30.8 percent, followed by Hyosung Group with 21.2 percent.

In addition, one in five subsidiaries at other conglomerates -- including SM Group, E-Land Group and Dongkuk Steel Mill Group -- had negative net worth last year.

Kakao Group, whose flagship is Kakao, the operator of Korea’s top mobile messenger service, KakaoTalk, had the largest number of units with negative capital at 14, or 19.4 percent of its 72 subsidiaries.

Among the top 10 conglomerates, Lotte Group had the largest number of capital-eroded units at nine, followed by LG Group with five and Hyundai Motor Group with four. Samsung Group, Korea‘s largest conglomerate, had just one subsidiary whose liabilities were larger than its assets.

By Park Han-na and news wires (hnpark@heraldcorp.com)







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