Seoul offers loans to help stem losses from N. Korea tour suspension

SEOUL, Dec. 26 (Yonhap) -- South Korea will extend government loans to investors
in tours to a North Korean mountain resort to help stem mounting losses from the
suspended project, officials said Friday.
The Unification Ministry handling inter-Korean affairs approved a motion to
provide the loans worth 7 billion won (US$5.4 million) out of its inter-Korean
cooperation fund for investors in the Mount Kumgang tour project, ministry
spokesman Kim Ho-nyoun said.
The investors face snowballing losses since the South Korean government suspended
the decade-long tour program on July 12, a day after a South Korean tourist was
shot dead by a North Korean solider there. The incident instantly froze
inter-Korean ties that had been already unraveling since the inception of the
conservative Lee Myung-bak administration in February.
Hyundai Asan Co., the operator of the tour project to North Korea, says its
losses over the past five months reached 80 billion won.
The loans will be provided for some of about 30 smaller firms that have
altogether injected 12 billion won to build hotels, restaurants and a golf course
in the resort with Hyundai Asan.
"They are going through a very difficult situation," the ministry spokesman said.
"Their assets are tied down in North Korea, and it makes them ineligible for bank
loans."
Selected firms will receive the one-year loan through the Export-Import Bank of
Korea, officials said.
hkim@yna.co.kr
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