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.