Minister Jin: ¡°Hyundai Construction should be revived through its own efforts¡±

Finance and Economy Minister Jin Nyum said Thursday that if Hyundai Engineering and Construction (HEC) finds it difficult to revive through its own efforts, the company will be declared bankrupt and creditors will push for a debt-for-equity swap to take away managerial rights. But in the worst case scenario, the government would also consider placing the company under court receivership, he said.

Minister Jin made the remarks in a lecture held at the Inter-Continental Hotel, central Seoul, at the invitation of the journalism school of Korea University. During the lecture, he said that for the sake of the Korean economy, it would be best for HEC to revive through its self-rescue plan, which could restore confidence in the market.

But if the company finds it difficult to come back to life through its self-aid efforts, the minister said, it would be proper to push for a debt-for-equity swap as this would result in minimum side effects. He feared that if the company is placed under court receivership immediately, its overseas operations would suffer serious damage. Court receivership should be chosen as the last possible means when both self-rescue efforts and debt-for-equity swaps become impossible, Minister Jin said.

About Daewoo Motor, he regretted that the company went bankrupt eventually even though the government gave the management and labor union two days to solve their disputes and avert bankruptcy. He emphasized that the government had no choice but to deal with insolvent companies according to market forces and principles.

Kwon Soon-Hwal shkwon@donga.com