May and June were busy months for the Hyundai Group, which has been squarely in the public spotlight for two key reasons. First, the requests for extensions of overdraft limits from Hyundai Engineering Construction and Hyundai Merchant Marine to their creditor banks. Second, a glaring W1.2 trillion $1.08 billion negative net asset situation at Hyundai Investment Trust Securities.
The immediate cause of these problems was the Daewoo default last year. This event caused direct losses to be absorbed by Hyundai Investment Trust Securities. It precipitated a chain of events that caused a sharp pullback in the domestic bond and money markets. The financially weaker Hyundai companies, in particular, had relied on these markets for...
