Hyundai-Daewoo Face Stern Government Warning

Hyundai and Daewoo, two of Korea's largest conglomerates or chaebol, failed to pass restructuring standards set by bank creditors.
The two groups will be again ordered by creditors to correct their insufficient points.
Once a group receives its first warning, it should make ends meet by shedding its debt or through some other alternative. Otherwise, the group's creditors can confiscate holdings.
The time limit is generally within two months, and both chaebol groups will be hard-pressed to diminish their massive amount of liabilities in the short term.
In Hyundai's case, it failed to induce 5.9 billion dollars of planned foreign capital, introducing only 501 million dollars.
Daewoo, as of late 1998, has a debt-to-equity ratio of 527 percent, which is far more than its initially-stated goal of 308 percent.
Financial experts predict that both will have to sell some minor affiliates to meet the deadline.
Hwashik Bong : trojans@joongang.co.kr