S.Korea Inc. ramps up cash reserves amid economic woes

South Korean companies are rushing to raise cash from the beginning of the new year amid growing concerns over a global economic downturn and market uncertainty.

Daesung Holdings Co., a mobile service provider that operates the videotelephone app Skype in Korea, announced on Jan. 3 it has sold 100,000 shares in Seoul City Gas Co. (SCG) for 40.1 billion won ($31.4 million) to secure funds for new businesses. Through the divestment, Daesung Holdings' SCG ownership dropped from 17.6% to 15.6%.

The mobile service company also dumped SCG shares in August and November of last year, raising 65.7 billion won via block deals.  

On the other hand, steel giant POSCO is planning to issue corporate bonds worth up to 800 billion won. The company will use the proceeds to repay part of its 2.02 trillion won debts, the maturity of which comes this year.

Leading battery maker SK On Co. is also set to raise $4 billion in March via BlueOval SK, its joint venture with Ford Motor Company, through a US government loan program. The program, called Advanced Technology Vehicles Manufacturing (ATVM), provides loans at an interest rate similar to that of the US Treasury.

Ultium Cells LLC, the JV between Korean battery maker LG Energy Solution Ltd. and General Motors Co., attracted $2.5 billion via the program last December to expand lithium-ion battery production capacity across the US.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jihyun Kim edited this article.