Sales of Hyundai Investment Trust & Daewoo Motor to Progress Rapidly

Sale of Hyundai Investment, which has been dragging for more than a year, is likely to be concluded within this month. As the third negotiation with GM began, the overseas sale of Daewoo Motor is also rapidly progressing.

Yoo Ji-Chang, vice-chair of the Financial Supervisory Commission (FSC), said yesterday that ``the negotiation with the American International Group (AIG), a U.S. insurance company, over the sale of Hyundai Investment Trust will be concluded within 2 weeks, as late as within one month.`` Chung Gun-Yong, president of the Korea Development Bank, said at the press conference that ``although the result of the consulting analysis is that it is better for Daewoo Motor to liquidate than to continue to manage the company, the government is continuing negotiations with GM in terms of the national business management.``

- Hyundai Securities is also to be sold: The settlement of negotiation over Hyundai Investment Trust indicates that the price of selling 16.6 percent share of Hyundai Securities to the AIG is to be determined. After the negotiations over Hyundai Investment Trust began, the AIG has made known its intention to buy Hyundai Securities as well, and has played a tug of war over the issue of price. Lee Kuen-Young, chairperson of the FSC, mentioned on June 18th that ``the matter of deciding the price is only left in terms of selling shares of Hyundai Securities.``

Although Hyundai Merchant Marine and Hyundai group chair Chung Mong-Hun has showed an attachment to the management of Hyundai Securities at first, he was reportedly to have decided to sell the shares after having been informed by the government that `financial business is difficult` in relation to the insolvency of Hyundai Life Insurance.

Hyundai Merchant Marine hopes to sell stock at 20,000 won per share. Meanwhile, the AIG was reportedly to have suggested 30-40 percent of premium to the current stock price of Hyundai Securities, which is 10,000 won per share. If the sale price of Hyundai Securities is determined, the rest is anticipated to be resolved easily. The AIG`s amount of investment is 1.1 trillion won. The government is likely to indirectly aid 800 billion won through the Korean Securities & Finance.

- Daewoo Motor will not be sold cheaply. The government`s principle on the sale of Daewoo Motor, told by Chung Gun-Yong, chairperson of the Korea Development Bank, is that `liquidation is unimaginable and Daewoo Motor will be sold in its own value`. Chung said that Arthur & Anderson`s analysis result on assets and debts, which reported `the value of liquidation of Bupyong factory as 2 trillion, and the value of retention as only 90 billion won`, was unacceptable. Chung said that ``although the value of liquidation is high, the reality is not managed by economic logic only.``

Chairperson Chung turned down some of the assertion that said ``Daewoo Motor, in fact, should be sold for free to consider Daewoo workers and the related companies.`` Chung said that free sale meant a huge loss of creditors, implying that the government would sell it in its own value. Chairperson Chung said that ``the government has an extraordinary measure in preparation for the worst case, such as breakdown of negotiations.``

nirvanal@donga.com