Chaebol General Motors and Renault. The chaebol debts were not only to state industrial banks but also to independent banks and their own financial services subsidiaries. The scale of the loan defaults meant that banks could neither foreclose nor write off bad loans without themselves collapsing, so the failure to service these debts quickly caused a systemic banking crisis, and South Korea turned to the IMF for assistance. The most spectacular example came in mid-1999, with the collapse of the Daewoo Group, which had some US$80 billion in unpaid debt. At the time, it was the largest corporate bankruptcy in history.
Chaebol flow concerns for paying foreign debts, the lower cost ultimately helped the stronger chaebol expand their brands to Western markets, but the simultaneous decline of nearby export markets in Southeast Asia, which had been fueling growth made the large debts incurred, for what was now overcapacity, become fatal to many of the chaebol. The remaining chaebol also became far more specialized in their focus. For example, with a population ranked 26th in the world, before the crisis, the country had seven major automobile manufacturers. Afterward, only two major manufacturers remained intact though two additional continued, in a smaller capacity, under