Hyundai plan would raise 1 trillion won

The framework of Hyundai Engineering & Construction's self-rescue plan has been revealed. There is no official announcement yet, but Kim Jae-Soo, head of Hyundai Group's restructuring team, disclosed the plan.

The plan stipulates that Hyundai sell various assets and invest personal assets to reduce HEC's debt and separate Hyundai Electronics Industries (HEI) and Hyundai Heavy Industries (HHI) from the group to restore investor confidence in Hyundai.

The key question is if the Chung brothers will help HEC to tackle its financial trouble. Hyundai Motor chairman Chung Mong-Koo and Hyundai Asan chairman Chung Mong-Hun reportedly have shown positive responses to such an idea. Kim said that HEI would be separated from the group at the earliest possible date.

If the projected self-rescue plan is realized, Hyundai Group will be divided into three smaller groups, each controlling construction, electronics and heavy industries, by the first half of 2002. Hyundai's automotive division was separated last September. Also, the group is expected to hand over its financial companies, including Hyundai Securities, to AIG, a U.S. investment company.

Eventually, chairman Chung Mong-Hun will control HEC, Hyundai Merchant Marine (HHM), Korea Development, Hyundai Logistics, Hyundai Information Technology and Hyundai Elevator. The plan also calls for selling Hyundai Corp. to Hyundai Motor or HHI, and Hyundai Autonet to Hyundai Motor. If auto and heavy industries units are separated, Hyundai Corp.'s businesses would be in trouble. That's why the group intends to sell off the trading firm to Hyundai Motor or HHI.

The self-rescue plan of HEC calls for selling Sosan Farm at 210 billion won, contribution of personal assets by former honorary chairman Chung Ju-Yung and chairman Chung Mong-Hun, and sale of real estates and stocks of its sister companies owned by HEC.

Kim said that Hyundai also would sell its property in Kye-dong (100,000 square meters) to HHI of MOBIS, formerly Hyundai Precision, and sell HEC's stake in new airport railway and other SOC projects.

If the known self-rescue plan is carried forward as described, Hyundai will be able to raise about 1 trillion won to tackle its liquidity problem.