S. Korea's Jinro Group collapses

SEOUL, South Korea (AP): Six main subsidiaries of Jinro Group, South Korea's 19th largest conglomerate, were declared bankrupt Tuesday after months of efforts to revive the nation's leading alcoholic beverage maker.

But creditors said they were willing to delay collecting loans and provide new funds for Jinro to save two of the six failed companies - Jinro Ltd., the nation's No. 1 whiskey distillery, and Jinro-Coors Brewing Co., a beer-making joint venture with Coors Brewing Co. of the United States.

Jinro also was seeking special court protection that would give it five years to shed money-losing subsidiaries and focus on the two alcoholic beverage companies.

The Commercial Bank of Korea, the main creditor, said the six Jinro units failed to honor a total of dlrs 45 million in maturing loans Tuesday.

Jinro Ltd., the largest maker of soju, a Korean whiskey, was the only Jinro subsidiary reporting net profits, although it was guaranteeing repayments of debts by other subsidiaries.

Jinro-Coors said it also expected bailout funds from its American partner.

In April, Jinro Group said it was trying to sell real estate and some of its 24 subsidiaries to ease a cash shortage. But it could not unload them quickly amid an overall economic slump.

Jinro's total debt amounts to dlrs 3.85 billion, most of it in bank loans that fueled its rapid expansion.

Jinro ventured into food, construction and retail businesses in the early 1990s when it lost much of the whiskey market to start-up makers following the government's deregulation of the alcoholic beverage market.

It also opened distilleries in Russia and China. In 1994, it entered the highly competitive beer market, opening the dlrs 345 million Jinro-Coors.

The introduction of Cass beer, a cold-filtered Coors brand, triggered a ruinous fight for the market. Beer breweries have poured hundreds of millions of dollars into new facilities and ads. But demand reached only 70 percent of the total supply capacity.

South Korea's slowing economy has left vulnerable many companies that expanded too fast and borrowed too much during the nation's boom years. This year, two steel makers and a major car maker collapsed or were nearly bankrupt.