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Hyundai Unit Seeks Reversal

Feb 12,2001
Hyundai Electronics Industries is taking legal action to protect its 219.7billion won ($174 million) investment in Hyundai Investment Trust and Securities.

The electronics unit asked the Seoul District Court on Saturday to reverse a decision by Hyundai Investment, in which Hyundai Electronics Industries is the majority investor with 27.3 percent, to issue new shares to pay off a debt to Hyundai Electronics.

Hyundai Electronics lent Hyundai Investment 219.7 billion won last June, to ease its cash crunch, handing over stocks of Hyundai Information Technology Co., Hyundai Logistics Co., and Hyundai Autonet Co. Hyundai Investment repaid Hyundai Electronics on Friday with a debt-to-equity swap, issuing new shares with a value of 5,000 won. At the time, Hyundai Investment's shares were being traded at almost zero.

If U.S. investors, led by American Insurance General, take stakes in Hyundai Investment, Hyundai Electronics' shareholders fear their stake in Hyundai Investment Trust will lead to losses.


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