Small Owners in Hyundai Engineering To Be Given 1/6 in Capital Writedown

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Small Owners in Hyundai Engineering To Be Given 1/6 in Capital Writedown

Creditors agreed Friday to write down the capital of Hyundai Engineering & Construction held by minority shareholders to about one-sixth of their total holdings, while reducing the equity held by the largest shareholder to zero.

The committee of creditors, including Korea Exchange Bank, had considered reducing Hyundai Construction's capital by a ratio of 7.8 to 1, to boost the builder's share price, which closed at 640 won (47 cents) Friday, to its par value of 5,000 won. But creditors decided to exchange the minority shareholders' stakes for new stock at a ratio of 5.99 to1, taking into account that a 23.3 percent stake held by Chung Mong-hun and creditors would be written off completely.

If the write-down plan fails to pass the special shareholders' meeting scheduled for May 18, due to opposition by minority shareholders, the creditors plan first to swap Hyundai Construction's debt for equity, based on the market price of the firm's stock, to secure an 80 percent to 90 percent stake in the builder, and then promote a write-down.

by Kim Won-bae

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