Hyundai Builder Faces Default Hearing in UK
Creditors are going after Hyundai Engineering & Construction in a British court. Domestic and foreign holders of bonds with warrants issued by the firm want the court to declare the builder in default.The financial institutions are conducting the legal action through Deutsche Bank, which lead-managed the bond sale. They include First Fire and Marine Insurance and Kyobo Life.
The total amount of Hyundai Construction's bonds with warrants held by domestic financial institutions is about $50 million. The bonds were issued in 1999 and mature next April, but include an option to redeem the investment one year before maturity.
The financial institutions asked for the early redemptions, but Hyundai's creditors, which recently converted the builder's debt to equity, refused, saying the bonds should have been included in the debt swap.
But Kyobo Life disagrees. "Since the bonds were issued abroad," an official said, "and the creditors exempted Hyundai's foreign debts from the swap, these bonds should be exempt as well."
The British court will rule on the matter by October, he added. If Hyundai is declared in default, it would have difficulties winning construction contracts abroad.
by Choi Hyeon-chul
with the Korea JoongAng Daily
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