Hyundai wins, Ford loses in Kia takeover

Hyundai wins, Ford loses in Kia takeover

SEOUL (Reuters): South Korea's Hyundai Motor Co Ltd was awarded the bid to take over troubled Kia Motors Corp and sister firm Asia Motors, the chief of the auction panel said on Monday.

Ford Motor, a major Kia shareholder, was disqualified after it offered a bid price for Asia Motors which was below the face value of 5,000 won ($3.74), Lee Jong-dae, president of the chief administration office of Kia Motors, told reporters.

The auctioning secretariat had said the bidding price per share should not be lower than the face value of 5,000 won.

Local newspapers reported on Monday Ford had wanted to take over Asia at 1,000 per share.

Unlisted Daewoo Motor Co was the runner-up in the auction, which also included a bid by unlisted Samsung Motors Inc, Lee said, adding that Samsung received the lowest number of points in the evaluation.

"Hyundai received the highest number of points in its demand for writing off the two automakers' debts and for its conditions in other areas," Lee said.

He declined to reveal how much of the two automakers' debts, estimated by some at 12 trillion won, Hyundai had asked to be written off but said the figure was "substantial."

Hyundai Motor Chairman Chung Mong-kyu would make a statement on its Kia bid at 0500 GMT, a Hyundai spokesman said.

State-run Yonhap News Agency last week quoted an unidentified creditor as saying creditors would refuse to choose a bid that asked for debt cuts above 6.0 trillion won.

The news agency said that meant Hyundai or Daewoo would win, because Samsung and Ford had asked for at least 7.0 trillion won in write-offs.

The government, which virtually nationalized the carmakers when state-owned Korean Development Bank became its largest shareholder last year, had indicated it preferred a takeover by Ford, which along with Japanese affiliate Mazda owns 16.9 percent of Kia.

Two earlier attempts to auction off the automakers failed after creditors refused to go along with bidders' demands for a write-down of the companies' debts.

Monday's bid decision needs to be approved by creditors before it becomes final.

After the bid winner was announced, Yonhap Television quoted Commerce Minister Park Tae-young as saying Kia and Asia would be forced into bankruptcy if creditors refused to approve the bid selection.

Confirmation of Park's statement was not immediately available.