Creditors Suspend Loans to LG

Bank creditors for LG Semiconductors held a meeting on December 28 to discuss LG's future especially in light of thwarted attempts on merging its semiconductor business with Hyundai.
Regarding this, President Kim Dae Jung urged creditor banks to impose every penalty measure possible in a meeting with Park Tae Jun, the United Liberal Democrats' president at the Blue House(Chong Wa Dae).
Creditors castigated LG for ignoring the government's warning on stonewalling the merger. They decided to cut off LG's money pipeline from now on. A serious measure designed to bring LG to its knees.
Banks and other financial institutions including Korea Commercial and Korea Foreign Exchange Banks will cease additional loans for LG and consider recalling past loans. In the event that former loans are not repaid, they have threatened selling LG's assets such as real estate that was used as collateral.
LG Semiconductor president, Koo Bon Joon, said to the press before the meeting, 'I am not thinking about the possibility that our bank creditors will deliver any penalty on LG since there is nothing to blame LG for.'
He hinted that LG will maintain and exercise its semiconductor administrative power despite the government's objection. Koo asserted, 'At any rate, we will file a suit against ADL which we believe damaged our reputation.'
LG has more than 3 billion dollars in long-term debt, and it is still uncertain whether those banks will actually squeeze LG's money supply at this stage. Rather they may seek to initiate more peaceful negotiations between Hyundai and LG.