Finance Minister Choo Kyung-ho called on the National Assembly on Wednesday to reenact the now-defunct corporate restructuring act that makes it easier for insolvent companies to begin an out-of-court debt restructuring program.

The Corporate Restructuring Promotion Act was legislated in 2001 with a sunset provision after South Korea was hit by the 1997-98 Asian financial crisis and had been extended five times before expiring last month.

It allows an insolvent company to start a debt workout program if more than 75 percent of creditors agree to the program, rather than requiring mandatory consent from all creditors.

"The removal of the management normalization means would cause companies to lose the chance of a timely, effective restructuring while suffering from a temporary crisis. It is also feared to make other smaller affiliates insolvent," Choo said during an emergency economic ministers' meeting in Seoul.

Companies have been suffering from managerial difficulties amid uncertainties at home and abroad, and the reenactment of the act is needed to put struggling firms back on track in a swift manner, he added.

Two lawmakers presented a revision to the act, but their deliberation has been postponed.

During the first half of the year, 724 companies filed for bankruptcy, up 60.2 percent from a year earlier, government data showed. (Yonhap)