By Kim Rahn



Debts of the nation's top 30 conglomerates almost doubled over the past five years, reaching a combined 600 trillion won, data showed Tuesday.



This raises concerns over their financial health, as half of them saw their ability to repay their debts decrease significantly.



Market forecasts reveal that more groups may face liquidity shortages besides Tongyang Group, whose key affiliates filed for court receivership after failing to repay maturing corporate bills and bonds.



Chaebul.com, an online business information provider, said Korea's top 30 conglomerates had 574.9 trillion won in combined debt at the end of last year, up 83.2 percent from 313.8 trillion won at the end of 2007 ahead of the global financial crisis.



The figure was larger than the national debt, which was 443.1 trillion won last year and is expected to reach 515.2 trillion won next year.



The research also showed most of the groups' financial health has deteriorated, with their debt ratios growing. A debt ratio is the ratio of a company's total debt to total assets, and the higher the ratio is, the less stable the firm's financial status is.



On average, the 30 conglomerates' debt ratio declined from 95.3 percent in 2007 to 88.7 percent in 2012. However, when excluding the top two, Samsung and Hyundai Motor, the ratio rose from 113.7 percent to 115.4 percent.



Fourteen of them saw their debt ratios rise, including six which had more than 200 percent, meaning the amount of debt for each company is more than twice their assets. They were Tongyang, Hanjin, Hyundai, Kumho Asiana, Dongbu and STX.



Tongyang's debt ratio skyrocketed from 146.9 percent to 1,231.7 percent in five years. The group's five key units applied for court control after failing to pay back corporate bills and bonds.



STX also has two of its affiliates under court receivership, while five others are under restructuring led by creditors.



"The economy became dull following the global financial crisis in 2008, but conglomerates expanded their businesses recklessly. Now they facing a debt bomb," chaebul.com head Jeong Sun-seop said.



These groups' interest coverage ratio also worsened except for Samsung and Hyundai Motor. The ratio, a gauge of a company's ability to repay debt, comes by dividing operating profit by interest charges.



When excluding Samsung and Hyundai, the 28 groups' average interest coverage ratio dropped from 4.45 to 3.67.



Some companies' ratios were even smaller than one, meaning they did not generate enough cash from their operations to meet their interest obligations. They included STX, Dongkuk Steel Mill, Hyundai, Halla, Hanjin Heavy Industries & Construction, Hanjin, Doosan and Tongyang.



LG Economic Research Institute analyst Lee Han-deuk said some groups may face liquidity problems when considering their debt and interest coverage ratios, although he declined to mention the names of specific companies.



"A high debt ratio means the company has poor earnings or unstable cash flow, so conglomerates with high ratios are concerned about having liquidity problems. The finance of companies in sluggish industries, such as construction or shipping, may get worse as the industries' economic condition may not improve over the short time," he said.



