Hyundai Group fulfills restructuring pledges

By Park Si-soo

Hyundai Group has almost completed a self-imposed restructuring plan, having made 99 percent of its fundraising target through asset sales and other financing schemes.

The company secured 3.27 trillion won in around a year by selling assets, issuing new shares and launching an aggressive cost-saving drive. This amount is close to the target of 3.3 trillion won it set in December 2013 when it was on the brink of collapse due to acute liquidity problems.

Hyundai is seeking to reach the goal by selling a 36.9 percent stake in its brokerage arm, Hyundai Securities, whose value is estimated at 610 billion won ($563.5 million).

Japanese company Orix and Korean private equity fund PineStreet made the shortlist to become the company’s new owner. The winner will be selected as early as this week, according to the Korea Development Bank (KDB), a key creditor bank.

“It’s hard to tell exactly when,” a KDB spokesman said. “I believe that things will be done in days to come ― perhaps in the latter part of this week.”

Hyundai refused to comment on the issue. “We are only taking a wait-and-see attitude,” a Hyundai official said.

Hyundai slipped into an acute liquidity crunch in early 2014 amid protracted money-losing operations of its key affiliates, including Hyundai Merchant Marine.

In December 2013, Hyundai Group Chairwoman Hyun Jeong-eun pledged to launch an aggressive self-restructuring program, putting several non-core assets up for sale.

Under the program, the company sold its logistics arm, liquefied natural gas transportation business, more than 30,000 container boxes, stakes in Shinhan Financial Group, KB Financial Group, Hyundai Oilbank and other non-core properties.

It has also improved its financial health by having Hyundai Merchant Marine and Hyundai Elevator issue new shares.