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Gov`t, creditors anguish over HEC

Posted March. 28, 2001 18:16,   


The government and creditors are anguishing over how to handle the issue of Hyundai Engineering and Construction (HEC). They are now reviewing two options: making a debt-for-equity swap first and offering fresh loans to save HEC from a liquidity crisis or putting the company under court receivership and then making a debt-for-equity swap.

``Vice Prime Minister and Finance and Economy Minister Jin Nyum, Financial Supervisory Commission Chairman Lee Keun-Young and Presidential Economic Chief Lee Ki-Ho met this morning and discussed the issue but failed to make a clear decision between the two options,`` said an official of the Finance and Economy Ministry. ``Creditors are expected to make a final decision on the issue Mar. 29 or 30,`` he said. Korea Exchange Bank, a main creditor of HEC, plans to summon a meeting of creditor banks Thursday at the earliest and decide how to resolve the issue.

The government and creditors are in a deep anguish as HEC`s losses amounted to 3 trillion won, much more than they had expected. Even if creditors decide on the debt-for-equity swap, it will take some time. But HEC, in a state of complete capital erosion, will be barred from issuing corporate bonds from next month under commercial law, so it will be unable to honor 100 billion won worth of corporate bonds that mature this weekend.