Asia Times: Daewoo to return to basics



	August 13, 1999	atimes.com

The Koreas

Daewoo to return to basics

SEOUL - The Daewoo Group, the country's second largest conglomerate, is likely to be stripped of all subsidiaries except its auto units once the government and creditors are through with its restructuring.

''Daewoo Group will be left with its auto making and trade units. But its trading operations will only serve to facilitate auto exports,'' Financial Supervisory Commission (FSC) Chairman Lee Hun-jai said in a press conference Thursday.

The group had 41 affiliates at the end of last year with assets of 76.7 trillion won ($64 billion), larger than the gross domestic product of the Philippines.

Daewoo is being pressed to sell most of its units, starting with the lucrative ones, to pay debts of 60 trillion won ($50 billion), of which $9.9 billion are from foreign lenders.

Daewoo will try to get Daewoo Motor back on track through a joint venture with General Motors of the US, Lee said. ''Timetables for the sale and outsourcing of other Daewoo affiliates will be set this month and carried out from next month,'' he said. ''All companies targeted for separation will be segregated within the year. For a quick process, we may have to cut off relations from the parent group first and settle payments later.''

''We are fighting time with the market's stability at stake. We have to inform the market quickly which of the Daewoo companies are capable of standing on their two feet under an independent identity and give them support through debt-to-equity swaps and other restructuring means,'' he said. Lee predicted that Daewoo Electronics and Daewoo Securities would be sold early but that the sale of the shipbuilding division of Daewoo Heavy Industries will take longer.

He said CEOs of the companies that seceded from the parent group could be recruited or picked among incumbent Daewoo executives.

(Yonhap/Asia Pulse)

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