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Technology Stocks : Zenith - One and Only -- Ignore unavailable to you. Want to Upgrade?

To: Terry Berg who wrote (4640)	3/17/1998 6:00:00 PM
From: Terry Berg	Read Replies (2) \| Respond to of 6570

Article on LG keeping ZE as investment.......................................... koreaherald.co.kr 03-18-98 Despite Sell-Off Rumors, LG Maintains Zenith at Center of Restructuring Drive By Yoo Cheong-mo Staff reporter Last month, when Hyundai Group sold off its chipmaking U.S. subsidiary, Symbios Logig Corp., during efforts to restructure, industry watchers predicted that LG Group's Zenith Corp would meet a similar fate. Observers, noting that Zenith suffered operating losses of around $100 million a year, expected LG to let go of the U.S. electronics subsidiary sometime in the near future. Likewise, foreign investors meeting with LG executives never fail to ask if the group plans to dispose of Zenith and, if so, when the sell-off would be timed. In the face of growing governmental pressure to streamline business lines, Korea's third largest conglomerate may find it difficult to retain a profit-losing overseas company with an uncertain future, stock market analysts said. Group executives have so far denied that they have any plans to sell off Zenith, a company of which the group owns a controlling 54.9-percent equity, purchased through LG Electronics in July 1995. ''LG is determined to develop Zenith into a specialized research and development company,'' said Chon Myong-woo, a spokesman for LG Electronics. ''Unlike in the recent past, Zenith aims to register about $60 million in operating profits this year. That enormous growth potential stems from its patents in the state-of-the-art digital TV technology.'' Despite mixed predictions for the digital TV service, which is scheduled to be launched in the United States in the second half of the year, LG and Zenith executives are optimistic that the digital TV market will grow into a multibillion dollar business, Chon said. He added that Zenith, which posted operating losses of $120 million on revenues of $1.35 billion in 1996, plans to withdraw from portable TVs, modems and other unprofitable business areas to accelerate managerial normalization. ''In the long run, LG aims to blend Zenith's high-definition TV design technology with LG Semicon's chip know-how to create enormous synergistic effects,'' Chon said. Meanwhile, LG is moving to shed marginal businesses. Last month, the LG Group said it would remove cross debt-payment guarantees among its affiliated companies and withdraw from 90 marginal business lines by the end of 1999. LG said that, by the year 2002, it would lower its debt-to-equity ratio to less than 200 percent by liquidating marginal businesses, selling off low-efficiency assets, outsourcing and carrying out other managerial reforms. On the recommendation of the government and IMF, LG will draw up consolidated group-wide financial sheets beginning in fiscal year 2000, a group spokesman said. The spokesman, who set the 90 marginal businesses' asset value at about 2.4 trillion won, said their disposal could be carried out through sales to foreign and domestic institutions, outright liquidation and transfer to small and medium-size businesses. But the group refused to release its list of marginal business lines, fearing adverse effects. LG's restructuring plan also calls for group owners to contribute personal assets to subsidiaries, while strengthening the outside director system to better protect minor shareholders' interests. Further, the group will expand assistance to small businesses to 2.5 trillion won by 2002. Evaluating LG's restructuring measures, a foreign stock-brokerage executive operating in Seoul said the group should focus on chemicals, refining and electronics _ sectors where its operations can withstand gluts in those markets. ''It's the strongest among the chaebols in chemicals, petrochemicals and oil refining, but it should probably exit the financial services,'' he said.

To: Terry Berg who wrote (4640)	3/17/1998 6:09:00 PM
From: Robert Utne	Respond to of 6570

Thanks Rick for the endorsement. I'm a little too "delicate", however, for the boys in Glenview to handle. The good old boys on the Board and all too many roaming the Gleniew halls rather sit around on their fat asses puffing stoggies and suppin 'tinies than rolling up their shirt sleeves and helping to make Zenith work. Must admit that I was impressed by that WSJ article on "Golden Eye". Someone in Glenview is starting to think. While I'm at it, if Daewoo plans to come out with a HDTV set priced at $2,500, why the hell can't Zenith do the same? Let's get this ball rollin.......