Hankook Real Estate Trust Co. files for bankruptcy

Creditors of Hankook Real Estate Trust Co. (HRET) announced Friday that the company had filed for bankruptcy. As a result, HERT is expected to be liquidated.

An official of the firm`s main creditor bank, Korea Exchange Bank (KEB), said, "HRET underwent workout programs for two years but failed to honor bills worth 83.9 billion won that matured on Jan. 31. It officially went bankrupt on Feb. 1.¡¯¡¯

"Creditors plan to readjust the debts of the company in such a way as to convert all unsecured bonds into capital and roll over the interest on secured bonds for two years. They asked non-conventional creditors to accept payment in bonds but failed to reach agreement with Samsung Heavy Industries,¡¯¡¯ he said.

He also said, "Retaining trust is the only way for a trust company to stay in business. There was serious doubt that the company still had trust, which is why it was placed in court receivership.¡¯¡¯

"There are also some difficult problems as to how to handle a possible liquidity crisis among the company¡¯s various branches,¡¯¡¯ he explained.

Out of the 65 branches of HRET, 33 have been unable to make profits and are seeking new owners. After they are sold, the losses of each company are expected to be shared by creditor banks.