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To: Tommaso who wrote (10442)	12/7/1997 7:06:00 PM
From: Haim R. Branisteanu	Respond to of 18056

S Korea: Shipbuilding conglomerate collapses MONDAY DECEMBER 8 1997 By John Burton in Seoul South Korea's 12th-largest conglomerate, the Halla shipbuilding group, collapsed at the weekend after its creditor banks curtailed loans and forced it to default on debt payments. More highly leveraged conglomerates are expected to follow Halla after the government suspended the operations last week of nine of Korea's 30 investment banks, a vital source of short-term corporate financing. Coryo Securities last Friday became the first Korean brokerage house to go bust in 35 years after its investment bank subsidiary was included among those suspended. ft.com The government is also resisting pressure from the International Monetary Fund to close at least two insolvent commercial banks soon because of fears that this would trigger a run on bank deposits and further restrict corporate lending. Added pressure on liquidity is coming from domestic financial markets. Interest rates have soared to a 15-year high of 19.95 per cent. Halla amassed debts of at least $6bn as it completed the construction last year of a new shipyard which has yet to produce its first finished vessel. Halla also invested heavily in building overseas cement plants and expanding car-component facilities. However, the outlook for other Korean shipbuilders is improving, since the weak Korean currency is likely to boost ship orders. "Halla expanded itself into bankruptcy," said Peter Bartholomew, managing director for Industrial Research and Consulting in Seoul. Halla was established by the brother of the founder of Hyundai and has received financial support from Korea's leading conglomerate. But Hyundai said it had no intention of taking over Halla subsidiaries, including its shipbuilding and car-component operations that would complement Hyundai's own. Some analysts believe that Hyundai may yet be forced to acquire Halla's Mando Machinery, Korea's largest car-parts maker, since its bankruptcy could threaten production for all of the nation's carmakers. Haim