|April 27, 1999||atimes.com|
Hyundai to shed 53 units in debt reduction plan
SEOUL - Hyundai Group, SouthKorea's biggest conglomerate, says it will cut its units bytwo-thirds to 26 as part of a plan to slice its debt to 45.4trillion won ($38 billion).
Hyundai, which now has 79.3 trillion won of debt, aims toraise 33.85 trillion won by selling businesses, assets andshares. Like most Korean industrial groups, it's undergovernment pressure to trim its debt.
Hyundai said Friday it will sell 5.25 percent of its stakein Dacom, Korea's second-biggest phone company, to LG Group.The stake is worth about 86 billion won, based on Friday'sstock market price. LG, in turn, is selling its computermemory chip making unit, LG Semicon Co., to HyundaiElectronics for 2.56 trillion won.
Hyundai's moves come before next week's expected meetingbetween President Kim Dae Jung and the heads of Korea's fivebiggest industrial groups, or chaebol. At that meeting, Kim isexpected to seek firm commitments by chaebol chiefs to followthrough on their promises to cut their debt.
Hyundai didn't identify which other units besides theDacom stake it will target for sale, though it said theywould be profitable companies with assets exceeding 1 trillionwon each.
Maeil Business Daily reported they would include InchonIron & Steel Co., one of Korea's biggest steelmakers, andHyundai Pipe Co., which earned 6.8 billion won last year.
The government, which sees cleaning up the finances ofthe chaebol as crucial to the country's recoveryfrom recession, has threatened to cut Hyundai off from freshloans if it doesn't reduce its debt fast.
Hyundai has said it will spin off its auto business by nextyear and break up the entire group into five differentbusiness groups by 2003.
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