Hyundai Engineering resorts to brinkmanship with banks

Hyundai Engineering & Construction managed to swing a stay on all debt repayments until year-end and is now pushing for W180 billion of fresh loans. Can Korea afford not to lend the money?

Jim Regan

July 28, 2000

Hyundai Engineering & Construction’s (HEC) message to the Korean government and creditor banks in recent days has been clear; without further liquidity support the company will fold, taking with it the current fatade of normality in the Korean economy. To drive home this message, HEC froze payments to its 19,000 employees for one day. The move worked and the company's 12 domestic creditor banks agreed to halt all debt repayments until year-end.

A day later, HEC decided to push its luck, requesting that creditor banks extend fresh loans totalling W180 billion ($162 million) so it could settle short-term debts with non-bank creditors. So far these haven’t been forthcoming and Hana Bank and the Industrial Bank of Korea have both ruled out the possibility of fresh loans to HEC.

Sign in to read on!

Registered users get 2 free articles in 30 days.

Subscribers have full unlimited access to FinanceAsia.

Not signed up? New users get 2 free articles per month, plus a 7-day unlimited free trial.

Questions?
See here for more information on licences and prices, or contact [email protected].