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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: richard surckla who wrote (59955)	11/2/2000 2:41:23 PM
From: Don Green	Read Replies (2) \| Respond to of 93625

The more I read in the Korean press, the more you got to wonder how long Hyundai will even be able to afford to pay their legal fees for the Rambus suit. I wonder if Micron will offer to subsidize those expenses?? Hyundai on Corporate Fire Sale By Oh Young-jin Staff Reporter When an individual or corporation faces a financial dilemma, it is usual to sell assets at fire-sale prices as a last resort. But often times, prospective buyers often engage in stalling tactics in anticipation of a lower price or sometimes, the assets put up for sale are just not viable enough. They become less valuable as a result. Just before its collapse, the insolvent Daewoo Motor, once Korea's No. 2 chaebol and now a disgraced part of Korea Inc.'s history, tried to conduct a corporate fire sale of its own but the effort proved to be too late to save the conglomerate. The same thing is feared to be happening to Hyundai Group, Korea's largest conglomerate, after its affiliates are suffering one credit crunch after another. The irony is that Hyundai has insisted on being different from Daewoo, citing its lucrative business, but nowadays, the impressions are becoming unmistakable that it is following Daewoo's path and is feared to be the second case to shatter Korea's corporate myth of being ``too big to fail.'' In both cases, they could have avoided the unhappy situation if they had been more attentive to the markets' calls. According to Hyundai officials, the group has lost nearly 200 billion won due to its hasty sale of assets under the pressure of the creditors and government since its holding firm Hyundai Engineering and Construction was hit by the first liquidity crunch earlier this year. Hyundai Construction had to sell its stake in its affiliate Hyundai Heavy Industries at less than half its potential price, which resulted in losses of 90 billion won. Originally, Hyundai wanted to issue exchangeable bonds at a per-share price of 50,000 won but had to sell the shares directly to the market at the going price of 19,000 won. Hyundai Heavy, one of the most lucrative Hyundai subsidiaries, is expected to see its share price jump in the near future. Its sale of stakes in Hyundai Pipe and Hyundai Oil Refinery also resulted in 70 billion won in potential losses, Hyundai officials said. Hyundai Construction also conducted a hasty sale of its about 5 percent stake in Hanaro Telecom, the losses estimated at 20 billion won. Despite these and other asset sales, Hyundai achieved less than half of its 1.5 trillion won self-rescue plan as of Oct. 21. As things stand now, the creditors and the government are expected to turn up the pressure on Hyundai to cough up more cash through stepped-up asset sales. Assets that could go up for sale are unretrieved payment for its overseas construction projects estimated to be worth $500 million won. Hyundai has been engaged for months to sell its $180 million in credit owed by Iraq to a group of European financial institutions at a discount. Hyundai also has offshore real estate worth 50 billion won and 330 billion won-worth of real estate in Korea, according to Hyundai officials. Right now, the creditors and government want Hyundai founder Chung Ju-yung to sell his 3 percent stake in Hyundai Motor and his fifth son and heir Mong-hun to sell his personal assets to shore up the troubled Hyundai Construction. Having to part with hundreds of millions of dollars-worth in assets accumulated in return for the sweat they shed on the Saudi Arabian desert or other hinterlands, it is only natural that Hyundai feel a sense of loss. ``The atmosphere is terrible,'' one Hyundai official said about the morale of Hyundai workers. Others feel resentment about the forced sale of assets at basement prices. ``We are underpricing our valuable assets that we attained through our sweat, blood and tears,'' one other official said. ``Only if more time is given could we do better and turn around the company at less cost.'' But market watchers say that Hyundai Construction is paying for its loss of confidence with assets and that only if it could regain that lost confidence, it should go to the extent of selling all its assets. ``The first thing Hyundai has to do is to confront the issue _ what's happening to it is of its own making,'' a market watcher said, expressing concern about the prevalent attitude in Hyundai that if it falls, the country falls. Others say that Hyundai has to sell its assets at even lower prices, while it still can. Daewoo wanted to sell assets but failed to, because prospective buyers smelled blood, stalling for time until the prices hit bottom, or because its assets lost value. ``I hope that Hyundai will not make the same mistake,'' an industry watcher said. Pointing to the case of Daewoo Motor, the insolvent group's flagship that still remains on shelf due to unwise sale tactics, he said that the value of assets often goes down as sale effort is dragged out. ``Sometimes, it is not the price but speedy sale that is important,'' he said. ``The decision is up to Hyundai.'' oh@koreatimes.co.kr