Seoul: The financial regulator announced on Tuesday that the struggling petrochemical sector should formulate restructuring strategies, such as reducing output, to qualify for financial assistance.

According to Yonhap News Agency, Kwon Dae-young, vice chairman of the Financial Services Commission (FSC), emphasized that petrochemical companies have yet to present sincere and concrete restructuring plans. He warned that without detailed action plans, these companies would not receive financial support.

Earlier in the day, a coalition of 17 banks and state-run policy lenders agreed to offer financial aid, which includes reducing lending rates, extending loan maturities, and providing new loans, contingent upon the sector's voluntary restructuring initiatives.

The local petrochemical industry has been grappling with a prolonged oversupply, resulting in low prices, particularly amidst the economic slowdown. The government is urging companies in the sector to significantly reduce their output and streamline their business operations.