Workers fret over future, fearing cuts at Jinro plant

A tense atmosphere prevailed on Friday at the headquarters of Jinro Ltd., in Yangjae-dong, southern Seoul, as employees nervously pondered their future, which is linked to the firm’s being placed under court receiveship.

Jinro, the nation’s largest liquor maker, posted operating profits of 59.3 billion won ($50 million) for the first six months of the year, topping its target of 50 billion won.

But workers were uneasy because the firm had been placed under court receivership in May, as requested by Goldman Sachs Group Inc., Jinro’s largest creditor.

“Full-scale personnel realignment and staff cuts will come after the fate of [Jinro] is determined,” said the head of Jinro’s labor union.

The local distillery said there are two ways to revive Jinro, which carries an estimated 2 trillion won in debt and has 76.7 billion won in capitalization. One way is to let the firm succeed on its own. The other is through a merger or an acquisition.

Lee Won, Jinro’s new manager, said Jinro could survive on its own if it were able to shed some of its debts. “I would like to attract foreign investment,” Mr. Lee said.

He added that he would like to meet with Goldman Sachs, which seemed to hold a favorable view of Jinro’s new management. Goldman Sachs was at odds with the previous management, led by Chang Jin-ho.

Jinro’s future will be determined around April 2004 after management reviews the options available through a debt workout, mergers or acquisitions.

Reviewing Jinro’s debt, devising plans to revive the company and selecting the top negotiator to oversee Jinro’s future should be determined before that time.

Goldman Sachs, which holds about 5 percent of Jinro debt, is reportedly moving to improve relations with the new Jinro management, business associates said.

It would be difficult for Goldman Sachs to recover its investment in the near future if the firm opts to revive on its own.

by Choi Ick-jae