Creditors take over Daewoo

The package will include negotiations for the rollover of foreign debt, debt-equity swaps, sell-offs and spin-offs of Daewoo units, the financial watchdog said.

The four banks will immediately form a task force headed by Korea First Bank governor Ryoo Shi-Yol to implement the package.

"Daewoo launched its own corporate restructuring programme about a year ago but little progress has been made," an FSC spokesman said, adding that creditors would take the initiative and enforce a thorough restructuring.

"The task force will evaluate Daewoo’s assets and debts and discuss restructuring measures, including the spin-offs, mergers andacquisitions and the division of the group into different sectors," the spokesman said.

The task force will also include foreign consultants to help enhance transparency in the restructuring process. The FSC said the task force would carry out a sweeping survey of Daewoo’s units operating overseas to evaluate their assets and debts, and that Daewoo’s foreign creditors could take part in the process.