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Combined debt of S. Korean conglomerates reaches nearly 600 tln won

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(Globalpost/GlobalPost)

SEOUL, Oct. 1 (Yonhap) -- The combined debt of South Korea's 30 major conglomerates by assets nearly doubled to about 600 trillion won (US$558 billion) in five years as they expanded their businesses, data showed Tuesday.

About half of family-controlled conglomerates, known as chaebol, saw their debt ratio also increase, according to the data compiled by Chaebul.com, which tracks the country's conglomerates.

The total debt of the 30 conglomerates amounted to 574.9 trillion won at the end of last year, up 83 percent from 261.1 trillion won in 2007, Chaebul.com said.

In comparison, the country's national debt stood at 443.1 trillion won last year. It is projected to expand to 480.3 trillion won this year and 515.2 trillion won next year.

The website said chaebol's debt ratio fell to 88.7 percent in 2012 from 95.3 percent in 2007. Still, the average debt ratio of 28 other conglomerates, excluding Samsung Group and Hyundai Motor Group, edged up to 115.4 percent in 2012 from 113.7 percent in 2007.

Samsung Group is South Korea's largest family-controlled conglomerate, and one of its flagship units is Samsung Electronics Co., the world's top maker of smartphones. Hyundai Motor Group, the world's fifth-largest carmaker, is the country's No. 2 conglomerate.

The data findings indicate that financial health of 28 chaebol worsened in five years. One of the 28 conglomerates is Tong Yang Group, whose debt ratio jumped to 1,231 percent in 2012, from 146 percent in 2007.

On Monday, Tong Yang Group's three units -- Tongyang Inc., Tong Yang Leisure Co. and Tongyang International Inc. -- filed for court receivership to try to avert bankruptcy.

Tong Yang Group is South Korea's 29th-largest conglomerate, though its asset ranking is pushed to 38th place when non-chaebol companies such as steel-making giant POSCO are included, and public companies are excluded in the list, according to Chaebul.com.

Jeong Sun-sup, the head of Chaebul.com, warned that the growing debt could cause trouble for the country's economy unless the debt is properly managed.

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