October 30, 1999 
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| October 30, 1999 | atimes.com | |
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| The Koreas Debt workouts decided for some Daewoo companies SEOUL - Domestic creditors of the troubled Daewoo Group have agreed debt workout arrangements for four Daewoo affiliates, including debt rescheduling, reduced interest rates and debt-to-equity swaps. After the latest audit showed Ssangyong Motor's assets to be 2.76 trillion won, and its debts to total 3.98 trillion won, creditors of the company (KSE: 03620) decided to swap 130 billion won ($108.5 million) worth of debts into equity stock and to acquire 53 percent of the auto maker. Capital will be decreased by 3:1 before the swap takes place. They will reschedule principal payment on the remaining loan of 1.66 trillion won ($1.4 billion) through December next year and cancel interest of 37.8 billion won. For remaining debts of 1.57 trillion won, interest rates will soften to 2-4 percentage points minus prime rates on collaterized bonds, and 1-2 percentage points below prime rates on non-collaterized bonds. Creditors will also provide new funds to the auto maker worth $150 million for opening letters of credit and $90 million for issuance of documents against acceptance. Ssangyong Motor can continue operations until late 2000 to seek a buyer. Its assets totaled 2.76 trillion won and debts 3.98 trillion won in the latest audit. Creditors of Keangnam Enterprises (00800) will swap debts of 170 billion won into equity stock and transform bonds into convertible bonds as well as softening interest rates. Rates will be 2.75 percentage points lower than prime rates on general loans and 11 percent on guaranteed bonds. Assets of the construction firm totaled 626.4 billion won and debts 696.9 billion won. A debt workout is unneccessary for Orion Electric (04390) whose assets exceeded debts by 178 billion won at 1.89 trilion won. Creditors will just lower interest rates by 1-3 percentage points. Creditors will separate Daewoo Electronic Components (09320) and put it up for sale. They will defer the principal payment on a loan of 63 billion won for two years through the end of 2001 and suspend interest payments until June next year. Creditors will have the company issue convertible bonds worth 5 billion won and buy them. Cross-guarantee debts will be exempted. Daewoo Electronics Component's assets of 365 billion won exceeded debts by 72.4 billion won. Meanwhile, a government source said Friday that debt workouts for Daewoo Corp (03810), Daewoo Motor, Daewoo Heavy Industries (00200) and Daewoo Electronics (07410) may be delayed for two to three weeks due to new demands by their foreign creditors. Foreign creditors said that, before joining the workout program, they need to scrutinize the rescheduling of their debts for six months. Korean creditors urged them to take only two or three weeks because they want to decide workout programs for the four companies next week. Now they must wait for the foreign creditors' decision to know whether the workout will be possible. Debts of the four companies total 49.68 trillion won, taking up 83 percent of the group's total debts. Foreign creditors hold debts of $6.7 billion, or 15.5 percent of the conglomerate's total debts of $43.1 billion. Of Daewoo's foreign debts of $6.7 billion, 85 percent was borrowed by Daewoo Corp and Daewoo Motor. (Asia Pulse/Yonhap) | |||||||||
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