Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

World

Hyundai Motor signs initial deal to buy builder

SEOUL, Jan 14, 2011 – Hyundai Motor signed an initial agreement Friday to buy a controlling stake in South Korea\’s largest builder, a key creditor said, following a bitter family feud over the former Hyundai empire.

The automaker had been selected as preferred bidder last week after a court ruled in favour of creditors, who scrapped an earlier deal to sell their 34.88 percent stake in Hyundai Engineering and Construction to the Hyundai Group.

The giant Hyundai empire was split into separate units after the death of its billionaire founder Chung Ju-Yung in 2001. The automaker headed by his second son and other units went their own way.

The construction firm came under creditor control in a debt-for-equity swap in 2001.

The residual Hyundai Group is headed by Hyun Jeong-Eun, a daughter-in-law of the late founder.

In mid-November it was named preferred bidder for the construction firm, topping a rival bid from Hyundai Motor.

But creditors eventually scrapped the deal, saying Hyundai Group failed to give enough information about how it would fund the multi-billion dollar purchase.

Key creditor Korea Exchange Bank said Hyundai Motor would start a due diligence survey of the builder next week. The bank hopes to complete the deal by April but gave no price details.

Yonhap news agency said the final price could be adjusted by plus or minus three percent from the 5.1 trillion won ($4.57 billion) originally offered by the automaker.

Advertisement. Scroll to continue reading.

Hyundai Group — which includes a shipping firm, a brokerage, a tour company that operates projects in North Korea and an elevator maker — angrily rejected suggestions it could not afford the purchase.

It disclosed a new two trillion won fundraising plan.

But the Seoul Central District Court last week rejected the group\’s legal attempt to stop the creditors opening talks with other buyers.

Hyundai Motor, with affiliate Kia Motors, is now the world\’s fifth largest carmaker and better placed to fund the takeover.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...