Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: TI2, TechInvestorToo who wrote (20332)	12/7/1998 10:47:00 PM
From: BillyG	Respond to of 25960

Korea okays use of loans to help restructure industry semibiznews.com A service of Semiconductor Business News, CMP Media Inc. Story posted 12:45 p.m. EST/9:45 a.m. PST, 12/7/98 By Jack Robertson WASHINGTON -- The South Korean government today agreed to let the debt-laden chaebols convert some of the huge domestic bank loans into equity as part of a sweeping industry restructuring package, which includes the proposed chip merger of Hyundai Electronics Industries Co. Ltd. and LG Semicon Co. Ltd. Hyundai and LG have agreed that by Dec. 25, one of the companies would take over control of the new chip combine. The two companies have little choice since independent U.S. consultant Arthur D. Little Inc. will recommend on Dec. 22 whether Hyundai or LG should run the merged chip company. The consultant firm is under contract with the Korean government. Today's industry agreement also confirmed that Samsung Group will swap its fledging auto manufacturing operation to Daewoo Group in exchange for that firm's consumer electronics and home appliance subsidiary. The debt-to-equity swap approved by the government was the latest wrinkle in the prolonged struggle to get the chaebols' financial house in order. No details were available on the amount of debt that could be converted to equity or timetable for the transactions. The debt swap is contingent upon the chaebols selling off or closing down other money-losing operations and securing foreign investments. The five top chaebols agreed to cut their number of subsidiaries in half from 264 to 130 within a year. Previously the government had said any debt-for-equity swap would bar the domestic bank creditors from assuming management control of the corporations from the shares of stock they would receive. U.S. electronic competitors, including Micron Technologies Inc., have said they would scrutinize any debt-for-equity conversion closely to be sure the Korean chip chaebols weren't being bailed out from alleged reckless borrowing of the past. The Semiconductor Industry Association has been adamant that no IMF rescue funds to Korean domestic banks should be used to bail out that country's chip producers. The chaebols today also agreed to reduce their debt-to-equity ratios from levels exceeding 500-700% and 1,000% in the case of Anam Semiconductor to no more than 200% by the end of 1999. Earlier the chaebols had sought to relax the 200% level, claiming they might be unable to reach that threshold by the turn of the century. The chaebols again pledged to eliminate all cross-subsidies among their affiliate operations by the March 2000. Critics said the chaebols propped by losing units by diverting funds from profitable ventures.