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To: Mihaela who wrote (61251)	11/15/2000 2:02:30 AM
From: Barry Grossman	Read Replies (1) \| Respond to of 93625

Hyundai Group said it may also seek an early spin-off of Hyundai Electronics Industrial Co. by selling its remaining shares in the company. quote.bloomberg.com 11/15/00 00:54 Hyundai Group May Sell Headquarters, Trade Unit (Update5) By Kyunghee Park Seoul, Nov. 15 (Bloomberg) -- Hyundai Group, in a fifth attempt to rescue the construction company on which it was founded, asked former and current affiliates to buy its headquarters, trading arm and stake in the world's No. 2 memory chipmaker. The bid to bail out Hyundai Engineering & Construction Co. met with a cool response as two potential buyers swiftly rejected the plan. Korea's largest contractor, which has had problems meeting debt payments since May, needs to repay a fifth of its 5.2 trillion won ($4.6 billion) of debt by the end of the year. Hyundai's latest plan would go against government efforts to stop the practice among Korea's conglomerates of supporting loss- making companies with profits from stronger affiliates. At the same time, authorities want to avoid further labor unrest that could be sparked by a third large bankruptcy in just three weeks. ``Selling its assets to other Hyundai Group affiliates does go against the government's policy of not helping weak affiliates, but for Hyundai, there is no other way to raise cash,'' said Cho Duck Hyun, a market strategist at Hanwha Securities Co. in Seoul. Hyundai Motor Co., Korea's largest automaker, said it has received no request for buying trading company Hyundai Corp. and Hyundai Autonet Co., which sells cars on the Internet. But it has no plans to make the purchases. Hyundai Heavy Industries Co., the world's largest shipbuilder, said it was unlikely to buy the group's headquarters as suggested in the plan. Even so, the South Korean government may want to keep Hyundai Engineering afloat at the cost of backtracking on its own policies as international interest grows in North Korea. Hyundai has spearheaded South Korean investments in the North. It already runs a tourism project in eastern North Korea and is planning an industrial complex in that vicinity. The government ``is acknowledging that in short-term that it is simply unable to swallow an entity of this size going into receivership,'' said Timothy Condon, chief economist at ING Barings in Hong Kong. Saving Hyundai President Kim Dae Jung won this year's Nobel Peace prize for his inter-Korean summit in Pyongyang in June, which came after earlier business visits by member's of Hyundai's founding Chung family. President Bill Clinton is considering his own trip this year. Hyundai Engineering shares surged by their 15 percent daily limit for a second day on the new plan and hopes that the Korean government would not allow the company to falter. Korea Exchange Bank, Hyundai Engineering's main creditor, set today as the deadline for submitting its latest self-rescue plan. Ultimately, Hyundai Engineering's survival may depend on how well its majority shareholder, Chung Mong Hun, can mend relations with his older brother who heads former affiliate Hyundai Motor Co. The two brothers fought over management of the group in March. Hyundai was rebuffed earlier by Hyundai Merchant Marine Co., the country's largest shipping company, and Hyundai Motor, which refused last week to help raise funds for Hyundai Engineering. Hyundai Motor and Hyundai Mobis Co., Korea's largest auto parts supplier for Hyundai Motor, cut ties to Hyundai Group two months ago and now comprise Korea's fifth-largest industrial group. Hyundai Group said it may also seek an early spin-off of Hyundai Electronics Industrial Co. by selling its remaining shares in the company. The government greeted Hyundai Group's announcement with some caution. ``Hyundai's restructuring is in the right direction,'' given the reported plans, said Lee Sung No, credit supervisory department director at the Financial Supervisory Service. Still, ``creditors and the government will have to see if they come up with marketable assets and actually carry out the pledges.'' Cash Crunch Hyundai Engineering, trying to stave off bankruptcy after defaulting twice on its debt two weeks ago, has 50 billion won ($44 million) due in corporate bonds Friday and 20 billion won in promissory notes due this week. It is in negotiations to delay early payment on three quarters of $80 million in overseas bonds. The company yesterday secured a $184 million loan from state- owned Korea Land Corp., a property developer that agreed to make the loan on condition that during a one-year period it will help sell plots of farmland that the nation's biggest contractor owns in Sosan, worth 350 billion won ($308 million). Hyundai Engineering has been experiencing cash problems since May. Much of the company's debt problems stem from its failure to collect payment from overseas orders. Last year, Hyundai Engineering said it lost 121 billion won for uncollected fees. The company's loss widened to 250.2 billion won in the first nine months of this year as the contractor lost money selling businesses and shares in other affiliates to meet creditors' demands. Hyundai Engineering said it had 157 billion won of extraordinary losses in the first nine months stemming from those sales. It also had to write off 191 billion won of contract fees it couldn't collect over the past 10 years. Hyundai Motor shares rose 0.65 percent to 15,400 won, while Hyundai Heavy shares fell 0.79 percent to 18,850 won.