Hyundai Merchant to sell assets

Hyundai Merchant to sell assets

South Korea's largest shipping firm Hyundai Merchant Marine Co said on Friday it would raise up to 1 trillion won (US$785 million) through sales of assets and securities by the end of the year to pay down debt.

The company chalked up 165.7 billion won of net losses through the third quarter this year due to heavy exposure to other ailing Hyundai companies and its unprofitable tour business to North Korea.

Analysts said the fund-raising was a step in the right direction, but completing it would take time given a global slowdown.

Hyundai Merchant was expected to sell all of its six port terminals at home and abroad for about 500 billion won and share holdings at two sister firms for about 400 billion won, a company spokesman told Reuters.

"We also are negotiating with three U.S.-based investors to sell our office buildings for about 100 billion won," chief spokesman Kang Sung-koo said.

Shares of Hyundai Merchant were up 100 won to 2,000 by 0500 GMT, outpacing a 3.3 percent rise in the broader stock market index.

Kang said the fund-raising plan, if successful, would effectively chop its interest-bearing debts to about 1.8 trillion won from 2.8 trillion.

"We will be able to earn more than 100 billion won of net profit in 2002 due to softer financing costs and lower oil prices," he said.

State-run Korea Development Bank said earlier in November it could offer a bridge loan to Hyundai Merchant in case of a temporary cash shortage before it launched its own rescue efforts to raise money.