Creditors demand new Hyundai plan

Korea Exchange Bank, the main creditor bank of Hyundai Engineering & Construction, has demanded an additional self-relief plan.

If the additional plan is satisfactory, the creditors are considering not to convert their loans to equity investment as well as not to deprive the company of management right.

Kim Kyung-Lim, president of Korea Exchange Bank, said that the bank has called for an additional plan for the company to normalize its operation in order to avoid the debt-to-equity plan, as it is burdensome to the bank. He noted that the plan demanded by the creditors would include chairman Chung Mong-Hun's participation in Hyundai's capital increase by selling his personal stock holdings.

Creditors said that Chung's participation in a capital increase would be made as a separate measure to his purchase of a 23.9% stake in Hyundai Merchant Marine by selling his ownership in Hyundai Electronics Industries. A senior executive of Korea Exchange Bank also said that the projected plan would include Chung's participation in affiliates' capital increases and sale of reclaimed land in Seosan.

The bank ordered such a plan because the original plan to raise 1.5 trillion won is almost impossible to realize due to the slump of the stock market. Currently, implementation of Hyundai Engineering's self-relief plan is delayed, and the rollover of its existing loans isn't easy as a result of mounting distrust in Hyundai.

An official at the Financial Supervisory Commission said that conversion of debt to equity would be carried out unless Hyundai submits a reasonable self-relief plan by the end of October.