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Managerial rights of Hyundai Group¡¯s 3 financial firms to be handed over to AIG

Managerial rights of Hyundai Group¡¯s 3 financial firms to be handed over to AIG

Posted November. 10, 2000 19:49,   


The managerial rights of three financial firms affiliated with Hyundai Group will be handed over to American International Group (AIG), an insurance company based in the United States, by the end of this month at the earliest. The affiliates are Hyundai Securities (HS), Hyundai Investment Trust and Securities (HITS) and Hyundai Investment Trust Management (HITM). As a result, the number of Hyundai affiliates will be reduced to 21. Hyundai affiliates include Hyundai Engineering and Construction, Hyundai Electronics Industries and Hyundai Merchant Marine (HMM).

Lee Chang-Shik, president of HITS, said that his company held negotiations to sell off the three Hyundai affiliates to AIG recently in the United States and agreed to hand over their managerial rights to the American firm. He expected that the main contract on the sale would be signed within November.

Previously, AIG considered investing US$1 billion in the three Hyundai affiliates by purchasing bonds, but decided to change the method to obtaining preferred stocks. The investment would make AIG the largest shareholder of the three companies and award it their controlling rights. In that case, AIG would hold a 23.7-percent stake in HS, a 16.6-percent stake in HMM, a 3.2-percent stake in Hyundai Heavy Industries and a 0.4-percent stake in Hyundai Mipo Dock Yard, exceeding Hyundai affiliates¡¯ total stock holdings (20.2 percent).

Lee said that under the agreement, AIG will be granted the right to appoint 50 percent of HS and HITS¡¯s executives, including CEOs, and will also change the affiliates¡¯ internal corporate controlling system (Compliance) to its own norms.

Meanwhile, it was reported that the government rejected AIG¡¯s demand for the rollover of debts worth 2.3 trillion won and lower interest rates, saying that this is impossible under current law. However, a Chong Wa Dae official commented that the government would be able to offer loans to HITS at current interest rates.