South Korea's Hanvit Bank Faces Potential Losses of up to $1.4 Billion in Daewoo Debt Workout

South Korean Hanvit Bank, the main creditor of the embattled Daewoo Group, is facing potential losses of up to 1.72 trillion won, or approximately $1.4 billion, due to debt workouts for Daewoo affiliates. This comes as the group's cash-strapped situation worsens, with loans extended to Daewoo companies estimated to be around 10.2 trillion won.

Key Takeaways:

Hanvit Bank may face losses of up to 1.72 trillion won (approximately $1.4 billion) due to debt workouts for Daewoo affiliates.
The loss ratio among creditor banks ranges from zero to 75 percent, with banks expected to see loans of 10.2 trillion won extended to Daewoo companies go down the drain.
Korea First Bank is expected to lose 1.49 trillion won, Export-Import Bank of Korea 1.39 trillion won, Korea Exchange 1.29 trillion won, and Cho Hung 1.05 trillion won.
Korea Development Bank faces losses of 960 billion won, KorAm Bank 740 billion won, Kookmin 380 billion won, and Housing and Commercial 270 billion won.
Daewoo is one of the largest shareholders in KorAm Bank, with creditor banks potentially seeing losses reduced if Daewoo's corporate value improves.
Financial authorities express confidence that most banks can handle the losses through recapitalization except for one or two weak ones.

Statistics:

1.72 trillion won (approximately $1.4 billion) - potential losses for Hanvit Bank due to debt workouts for Daewoo affiliates.
10.2 trillion won - estimated loans extended to Daewoo companies.
0-75 percent - loss ratio among creditor banks.
12 - number of Daewoo workout targets among creditor banks.
960 billion won - potential losses for Korea Development Bank.
740 billion won - potential losses for KorAm Bank.
380 billion won - potential losses for Kookmin Bank.
270 billion won - potential losses for Housing and Commercial Bank.

Sources:

Yonhap
(C) 1999 Asia Pulse Pte Ltd News Provided by COMTEX (http://www.comtexnews.com)