Ford eyes Kia

Ford eyes Kia

SEOUL: Ford reportedly has notified the Seoul government,
Korea Development Bank and Kia business group of its intention to
take over the ill-fated Kia Motors.

According to a report in the Korea Economic Daily, The Korea
Development Bank is scheduled to make additional investments in
Kia Motors early in 1998 to turn the ill-fated firm into a public
enterprise, and then the government wants to sell its equity
share of Kia Motors to Ford for the take over of Kia Motors'
managerial rights.

Ford has notified the Seoul government of its intention to
take over managerial rights of Kia Motors through purchases of
Korea Development Bank's equity share of the firm, a ranking
official at the Ministry of Finance and Economy revealed.

The government has positive views about Ford's proposals, and
a final decision on this takeover deal will be made through
further consultations with president-elect Kim Dae-jung and the
12-man emergency council formed for the settlement of economic
issues, he said.

The prerequisites put forth by Ford for the takeover deal also
call for the increase of Korea Development Bank's equity share in
Kia Motors from the present level of 300 billion won (30 percent
equity share) to help offset most of Kia Motors' bad debts.

More recently, Ford Motors vice president, Wayne Booker, said
that if the Korean government will take measures to reduce Kia's
enormous debts, it will positively consider expanding its equity
stake in Kia.

Yet, because of the exorbitant debts of the Korean automaker,
the possibility of the takeover is very unclear right now, Booker
said at the Detroit motor show.

Asked if Kia would be acquired by the Samsung Group, for which
rumors flared up a while ago, he said Ford has no choice but to
cooperate with any company that might acquire Kia, whoever that
might be, implying that many possibilities are still open on the
future Kia Motors' deal.