Tulvio: The only problem with your suggestion is that the Government of Korea has agreed with the IMF that new lending standards will be promulgated in the economy, thus, if Samsung wants to saty in the semi rat race, they will have to liquify somewhere else by selling assts to generate the cash required to upgrade to .25. I do not think that currently they can borrow more whatever the policy of the S-Korean government will be. If I was in the Samsung long range planning group, I would look at various activities I have and sell those that are in markets with intrinsic growth of less than10% per year, or sell some businesses where I would have no chance of controlling pricing. In essence, the transformation GE underwent when Welch took over, any business he could not see GE being number 1 or 2 in he sold out.
Samsung will have to contract to those businesses where they are real winners in. This is why I thought they may finally throw the towel on AST. Of course, in their view, AST might be a link within a vertical integration scheme, so they may decide to shed some other businesses, but they must generate cash, they cannot be expected to borrow more to get into the .25 race.
Zeev
Zeev |
