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Hyundai Motor to lower builder acquisition priceBy 최희석
Published : Feb. 21, 2011 - 18:17
According to industry sources, Hyundai Motor Group is seeking to reduce the amount paid for the 34.88 percent stake in Hyundai E&C due to additional debts the builder was belatedly found to be holding.
The negotiations are slated to be closed by Friday, but could go on for an additional three working days if the two sides fail to reach an agreement.
If the negotiations pass off without a major hitch, the creditors plan to seal the deal following a shareholders’ meeting within the month.
The developments follow the discovery of contingent liabilities and dishonored bonds amounting to about 800 billion won ($715 million) at Hyundai E&C found by Hyundai Motor Group’s due diligence team.
However, Hyundai Motor Group said in an e-mailed statement that the reported figure is incorrect and that it is unable to reveal exact figures due to a secrecy clause in the deal.
The conglomerate also said that the acquisition of Hyundai E&C will proceed as planned.
Regardless of the exact scale of additional debts discovered, Hyundai Motor Group is said to have submitted requests to the builder’s creditors to alter the price for the shares.
Under the memorandum of understanding signed by the conglomerate and Hyundai E&C’s creditors, the final price can vary by a maximum of 3 percent from Hyundai Motor Group’s bid.
The group’s bid is reported to be about 5.1 trillion won, 3 percent of which would be 153 billion won.
While the creditors are said to be holding to the 3-percent limit, Hyundai Motor Group is reported to be pushing for a reduction of around 300 billion won.
A Hyundai Motor Group official declined to verify the figures, saying only that such unseen debts are not uncommon and that the group will conduct the negotiations within the boundaries of the agreement with the creditors.
By Choi He-suk (firstname.lastname@example.org)
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