South Korea to do away with "zombie companies"

Severe economic problems in, not least, South Korea's shipbuilding industry now spur the country's government and banking sector to launch a colossal restructuring process. The aim includes efforts to divest a number of non-performing state-owned companies, so-called "zombie companies."

Photo: Thorbjørn Hansen

A zombie is defined as the living dead, which is why several of the hundreds of state-owned South Korean companies have been dubbed "zombie companies," because under any other circumstances these companies would have succumbed to death - but not in South Korea, where vast amounts of state capital injections are keeping them alive.

However it now looks like the South Korean government and the banking sector have finally come to the conclusion that it is unsustainable to keep these companies alive. The large state subsidies help to keep the wheels and cogs turning at companies which are thus not pushed perform the necessary efficiencies, and which are subsequently delivering continuously poor results and forced to repeatedly ask the government for help in order to survive.

Already a subscriber? Log in.

Read the whole article

Get access for 14 days for free.
No credit card is needed, and you will not be automatically signed up for a paid subscription after the free trial.

  • Access all locked articles
  • Receive our daily newsletters
  • Access our app
An error has occured. Please try again later.

Get full access for you and your coworkers.

Start a free company trial today

More from ShippingWatch

Höegh Autoliners joins climate coalition

Norwegian car carrier Höegh Autoliners enters climate alliance First Movers Coalition, also counting Maersk, as ”sustainability frontrunners within their sector.”

Maersk rejects shippers' complaint in USD 180m dispute

U Shippers has no case in a contractual dispute reported to the US Federal Maritime Commission, Maersk writes in a response to the FMC. Moreover, the case should not even be a matter for the commission, the company says.

Further reading

Related articles

Latest news

See all jobs