By Park Jin-hai
Cash-strapped Hyundai Group finished restructuring by overachieving with its self-rescue plan, generating 3.3 trillion won to relieve it from its worsening liquidity crunch.
The group, which has been pushing ahead with restructuring since December 2013, will secure some 3.57 trillion won. That is 108 percent of its original target in one and a half years.
Although the audit process remains, it nearly closed the conglomerate’s restructuring plan to pay back 1.3 trillion won of debt and lower the debt ratios of its key affiliates ― Hyundai Merchant Marine, Hyundai Elevator and Hyundai Logistics.
Hyundai Group units have been under growing financial pressure to support Hyundai Merchant Marine, the country’s No. 2 shipping line, which has recorded heavy losses in recent years following a slump in the global shipping industry.
They have also faced increasing calls from creditors, including the state-run Korea Development Bank, to cut its debt.
Its affiliate Hyundai Merchant Marine’s (HMM) sale of its liquefied natural gas transportation business played a critical role in business restructuring. With its sales to IMM Investment, the company raised nearly 970 billion won in May of last year.
In July 2014, Hyundai Group sold 88.8 percent of its logistics unit, Hyundai Logistics, to Orix for 600 billion won. Apart from the fresh cash, its stake sales could also break the circle of cross shareholdings that linked from Hyundai Logistics to Hyundai Elevator to HMM and Hyundai Logistics.
By changing the financial investor of Hyundai Pusan New-Port Terminal, it secured 250 billion won.
Hyundai says its restructuring is still an on-going process, with projects to liquidate its overseas terminals underway. HMM plans to sell its stakes in California United Terminals in Los Angeles and Washington United Terminals in Tacoma and raise 150 billion won.