$1.2 Billion for Hyundai

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$1.2 Billion for Hyundai

Creditor banks agreed Wednesday to invest 1.58 trillion won ($1.23 billion) in debt-ridden Hyundai Engineering & Construction through a debt-equity swap and a purchase of fresh issues. The decision is part of a bailout plan for the cash-strapped builder.

Hyundai's creditor groups decided in March to provide the contractor with a 2.15 trillion won bailout, calling for a debt swap of 1.4 trillion won and fresh loans worth 750 billion won.

After the March decision, it took nearly three months for the creditors to agree on the allocation of new funding.

According to the decision, banks will take charge of 73 percent of the total bailout. Insurance companies will invest 218.4 billion won, or 10 percent of the total, merchant banks 88.6 billion won, securities firms 76.2 billion won and credit card companies 43.2 billion won.

The shares were allotted in proportion to the total bond holdings in Hyundai of each creditor group as of March 28. But because the allocation was based on the assumption that all 41 creditors would participate in the plan, the assignments could change if some nonbank creditors refuse to participate in the swap.



by Suh Kyoung-ho

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