Hyundai passes through a crisis

Korea Exchange Bank, the main creditor bank of Hyundai Engineering & Construction Co., has decided to reexamine the possibility of Hyundai`s first and second self-relief packages in detail from July 31, seeing that the company got pass through its financial crisis.

Lee Yon-Soo, vice president of Korea Exchange Bank, said that the bank will ask Hyundai to submit an additional plan if it fails to meet the target for reduction of its debt by 1 trillion won after the reexamination.

The reexamination is likely to be an exploder of Hyundai crisis this fall. Presidents of 12 creditor banks of Hyundai said July 26 that Hyundai`s self-supporting package is highly likely to be realized. But, the plan was prepared purely base on the data submitted by Hyundai. So, Korea Exchange Bank officials see that it is unclear if the value of real estates and amount of projected stock sale would be realized as Hyundai calculated.

In fact, Hyundai asked the creditors that it could sell off stocks of Hyundai Heavy Industries and other blue chip affiliates after October so that it could sell them at proper prices.

Currently, Hyundai`s debt stands at 5.4 trillion won. The position of Korea Exchange Bank is that Hyundai has to reduce its total debt to 4.5 trillion won level. For this reason, if Hyundai`s self-supporting package is found to be unrealistic, the secondary financial institutions may begin collecting loans from Hyundai and Hyundai Engineering & Construction`s financial trouble at the end of the month may be repeated.