Life after the crisis: Asia moves on
Indonesia: Astra International
Thailand: Total Access Communications
The restructuring of the Hanwha Group has been the most dramatic in Korea following the Asian crisis. It has also been one of the most needed. "The top four chaebols, except Daewoo, have done a lot in terms of restructuring. But with Hanwha there was almost actual bankruptcy and the debt to equity ratio was over 1000%," says Terence Lim, an analyst at Merrill Lynch in Korea. "Now it is less than 200%."
Hanwha Group, which started off as primarily a chemicals company, had swollen to 32 disparate companies including retail and leisure companies and even a newspaper. Hanwha Group has since focused on its star performer Hanwha Chemical and is streamlining operations for maximum profitability.
The business restructuring took place at the group level in a three-pronged approach. Its non-core businesses were separated and some were sold to improve the overall financial structure, its unprofitable subsidiaries and some real estate was also disposed of through sales and share transfers. And its core business was targeted to secure liquidity.
The group's affiliated companies have already been reduced from 32 to 15 and should fall to 10 by the end of the year.