Hyundai Investments Sale, to Be Settled in a Day Or Two

Negotiations for the sale of Hyundai Investments overseas have entered the final stage after almost a year.

Vice President and Head of the Ministry of Finance and Economy, Chin Nyum announced on August 21 at a breakfast address held at the Seoul Lotte Hotel, ``If we reach a settlement, we may be able to announce the sale of Hyundai Investments to the American AIG Consortium.``

A high level official in the negotiations said, ``Actually, the major issue has been settled and we are at the stage of getting signatures. We are dealing with minor details at this point (securing a memorandum of agreement) and trying to proceed as quickly as possible.``

The conditions for AIG`s takeover of Hyundai Investments require an investment of 1 trillion and 100 billion won and the Korean government taking care of any deficits. It will buy Hyundai stocks on top of taking Hyundai Investments-Hyundai Investments operations. As the actual details of the sale negotiations have been kept top secret, almost nothing is known about them.

It is reported, however, that the delay was caused by difference in opinion between the government and AIG over disposal measures and costs for President Chung Mong Hun`s 16.6 percent Hyundai stockholdings.

On the Hyundai Investments side, there were initial discussions about President Chung`s `old shareholdings sale` However, Chung took into consideration the management premium and offered a price of 15, 000 won per share, higher than the current price of 10, 000 won. When AIG refused, a `stock issue` plan was proposed.

Investment experts observe, ``It seems that the government reached a settlement with `Hyundai Investments issuing stocks and leaving President Chung as the second major shareholder.``

Kim Seung-Ryun srkim@donga.com