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Inter-affiliate borrowing of chaebol up 18 pct in H1

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(Globalpost/GlobalPost)

SEOUL, Nov. 27 (Yonhap) -- The inter-affiliate borrowing of about 50 South Korean conglomerates increased 18.3 percent in the first six months of this year from a year earlier, data showed Wednesday.

The combined inter-affiliate borrowing of 49 conglomerates came to 2.24 trillion won (US$2.1 billion) between January and June, compared with 1.89 billion won in 2012, according to the data compiled by CEO Score, a website that tracks conglomerates as well as financial firms and state-run companies.

The increase comes as banks and other financial institutions are unwilling to lend money to conglomerates' units that have either poor financial health or low crediting ratings, according to the website.

Lotte Group, a family-run conglomerate, or chaebol, whose businesses range from department stores and discount stores to hotels and fast-food restaurants as well as a construction unit, topped the list with 562 billion won of inter-affiliate borrowing.

Lotte is followed by Tong Yang Group with 444 billion won of inter-affiliate borrowing, according to the website.

Five affiliates of Tong Yang Group have recently applied for court receivership for liquidity shortages after the group failed to pay back maturing short-term debts.

Booyoung Co., a midsize South Korean conglomerate, claimed the third spot with 298 billion won, while Homeplus Co., the South Korean unit of British retail giant Tesco PLC, took fourth place with 111 billion won, according to the website.

The inter-affiliate borrowing of Samsung Group, South Korea's biggest family-controlled conglomerate, stood at 3.7 billion won while that of Hyundai Motor Group, the world's fifth-largest carmaker, came to 2.4 billion won.

The website said 17 conglomerates, including LG Group and SK Group, had no inter-affiliate borrowing in the first half of this year.

LG Group includes LG Electronics Inc., the world's third-largest smartphone maker, while SK Group is South Korea's third-largest conglomerate whose businesses range from mobile communications to oil refinery.

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