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Young Chang bankrupt after buying halted by government.
Friday, September 24 @ 15:31:27 GMT
Contributed by Angelic_Layer
Young Chang Piano Co., the largest domestic piano maker, went bankrupt yesterday after the Fair Trade Commission prevented Samick, another large instrument maker, from taking over the company.
Korea Exchange Bank, Young Chang's major creditor, said yesterday the piano maker defaulted on a 460 million won ($400,000) debt on Monday. Its bankruptcy was finalized yesterday.
The stock market halted trade in the company's shares after the announcement.
"After the commission turned down Samick's buyout of our company, Samick stopped funding us. Even creditors refused to loan money to our company," said an official of Young Chang. "We are planning on applying for restructuring."
An official of Korea Exchange Bank said, "We will receive Young Chang's management plan and look through it to decide whether to proceed with restructuring or liquidate the company."
Young Chang reportedly has 69 billion won in debts held by six financial firms, including Korea Exchange Bank, Shinhan Bank, Hana Bank and Tong Yang Investment Bank.
The company graduated from a debt workout program in June 2002, but its debt increased after its management made excessive retirement payments while cutting its workforce. Young Chang's increasing financial problems led its management to seek to sell the company early this year.
On Sept. 9, the Fair Trade Commission announced its decision to halt Samick's attempt to take over Young Chang, reasoning that the buyout would lead Samick to monopolize the domestic piano market.
The commission told Samick to sell all the shares it bought from Young Chang to a third party. The industry called the order "typical red tape," which ignored the reality of the sector.
"The commission's policies are not even consistent. It disapproved Samick's buyout of Young Chang, but then approved INI Steel's takeover of Hanbo Iron & Steel Co., with just an additional order to exclude some sectors from the buyout to prevent monopolization," an industry source complained.
Friday, September 24 @ 15:31:27 GMT
Contributed by Angelic_Layer
Young Chang Piano Co., the largest domestic piano maker, went bankrupt yesterday after the Fair Trade Commission prevented Samick, another large instrument maker, from taking over the company.
Korea Exchange Bank, Young Chang's major creditor, said yesterday the piano maker defaulted on a 460 million won ($400,000) debt on Monday. Its bankruptcy was finalized yesterday.
The stock market halted trade in the company's shares after the announcement.
"After the commission turned down Samick's buyout of our company, Samick stopped funding us. Even creditors refused to loan money to our company," said an official of Young Chang. "We are planning on applying for restructuring."
An official of Korea Exchange Bank said, "We will receive Young Chang's management plan and look through it to decide whether to proceed with restructuring or liquidate the company."
Young Chang reportedly has 69 billion won in debts held by six financial firms, including Korea Exchange Bank, Shinhan Bank, Hana Bank and Tong Yang Investment Bank.
The company graduated from a debt workout program in June 2002, but its debt increased after its management made excessive retirement payments while cutting its workforce. Young Chang's increasing financial problems led its management to seek to sell the company early this year.
On Sept. 9, the Fair Trade Commission announced its decision to halt Samick's attempt to take over Young Chang, reasoning that the buyout would lead Samick to monopolize the domestic piano market.
The commission told Samick to sell all the shares it bought from Young Chang to a third party. The industry called the order "typical red tape," which ignored the reality of the sector.
"The commission's policies are not even consistent. It disapproved Samick's buyout of Young Chang, but then approved INI Steel's takeover of Hanbo Iron & Steel Co., with just an additional order to exclude some sectors from the buyout to prevent monopolization," an industry source complained.
