HITC Sold to U.S. Prudential
Hyundai Groups two financial-affiliated companies, the HITC (former Hyundai Investment & Securities Co., Ltd) and Hyundai Investment Trust Management Co., Ltd, will be sold to U.S. worldwide general financial group, Prudential, for 5,000-7,000 billion won.
The Korean government and Prudential have signed a contract for the sale of HITC and Hyundai Investment Trust Management Co., Ltd at the meeting of the Financial Supervisory Committee (FSC) in Seoul, Youido yesterday.
The government plans to invest 2.4-2.5 trillion won in public funds to HITC and after securing 100 percent of the shares, they will sell 80 percent of the shares to Prudential by the first quarter of 2004 when the investment of public funds are completed. Prudential will then take over the remaining 20 percent in the next three to six years.
It has been agreed upon between the government and Prudential that the final sale price will be settled by early next year at the point when investment of public funds are completed and after considering the cash flow and business results of the past year.
The financial trade estimated the sale price of HITCs entire shares to reach 5,000-7,000 billion won when applying those standards. This figure is somewhat lower than the 6,000-8,000 billion won (presumed figure) when contracting the MOU (Memorandum of Understanding) in March.
FSC vice chairman, Lee Dong-gul explained, From HITCs sale, the domestic capital market will meet at a new turning point and a restructuring movement in the investment trust and security industries will be quickened.
Even if a maximum of 2.5 trillion won in public funds are invested, the amount of withdrawal of public funds will reach only one trillion won after the sale of HITC and shares that Hyundai Group possess forecasting an approximately 1.5 trillion won loss in public funds.
The government promised to compensate in cash or bonds to HITCs minority shareholders after completely losing their shares. Also, the sale of Hyundai Securities Co., Ltd, which is the major shareholder for HITC and also responsible for its poor management, is being planned.
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