The country's second-largest conglomerate has already put its shipbuilding, commercial-vehicle, automotive-parts and electronics businesses on the block, and it is likely that more will have to be sold. Its founder and chairman, Kim Woo Choong, has donated his personal fortune to retain the support of creditors.

Nevertheless, Daewoo's financial state has become a major concern for policy makers and market watchers who already are fretting about a Korean financial sector struggling to recover from a mountain of bad loans. Daewoo could continue to cause instability in the economy for months to come; the conglomerate was saddled with 57.3 trillion won ($ 47.44 billion) in domestic and overseas debt as of the end of June.

Kim on Sunday promised that "Daewoo willresolve the liquidity problem as soon as possible, and building on this, complete the restructuring process by the end of this year".

But many bankers and analysts remain skeptical that Kim can extricate his company from its troubles. Financial-sector regulators warned in a report about a week ago that "Daewoo will go bankrupt" if creditors don't gain confidence in the group's reform program.

In an attempt to calm markets, Lee Hun Jai, chairman of Korea's Financial Supervisory Commission, a government regulatory authority, said Sunday that the government will maintain low interest rates - a sudden rise in which last week also damped stocks - and encourage investment-trust companies, which are exposed to Daewoo, to form stabilization plans. He also held out the possibility that the government would provide more funds to support the financial sector if necessary.

Creditors had agreed to extend payment deadlines on more than seven trillion won.