"We have reached a final agreement with our creditor banks and the government on renewed reform plans," Hyundai's restructuring chief Kim Jae-soo told reporters. Hyundai Group on Friday submitted a retructuring plan to its main creditor, Korea Exchange Bank (KEB), for review. Kim said Hyundai would secure 1.52 trillion won ($1.36billion) through various means, including sales of real estate assets and securities to help improve liquidity at its affiliates.

In a separate news conference, KEB president Kim Kyong-lim said he rated Hyundai's self-rescue plans as "specific and realistic." "Hyundai's self-rescue plans announced today are expected to basically solve liquidity problems at its key affiliates and I believe it would regain market confidence at an early date," said the bank head.Korea's financial markets have been pressured in recent weeks by the uncertainty over the Hyundai Group.

The Korea Composite Stock Price Index finished at 722.21 on Friday, down 29.75 percent from the end of 1999. Analysts said Hyundai's announcement would help dissipate much of market concerns over its liquidity problems."The new reform plans, which are comprehensive and more realistic, would have a very positive impact on the market," said Na Min-ho, an analyst at Daishin Securities.

But he cautioned Hyundai should implement the new restructuring plan as promised if it wanted to gain full market confidence.

"Hyundai has lost market confidence as it failed to keep its word. If Hyundai carries out its pledges this time, I think Hyundai would see its troubles terminate," said Na.Hyundai said it would issue exchangeable bonds (EBs) using Hyundai Engineering's stakes in Hyundai Heavy Industries and Hyundai Merchant Marine as collateral.

Hyundai Engineering holds a 6.9 percent stake in Hyundai Heavy and 23.86 percent of Hyundai Merchant Marine. "As is often the case with other construction companies, Hyundai Engineering has been exposed to a liquidity squeeze. But there will be no big problem in the future," said Hyundai's Kim.

Hyundai Group founder to sell 6.1 per cent stake
Seoul, Aug 13: Hyundai Group's founder will sell a 6.1% stake in Hyundai Motor Co., making it possible for the auto maker to become independent of the conglomerate, Hyundai Group said Sunday.

The sale is valued at around 220 billion won ($197.2 million) and should take place by the end of the year, said Kim Jae Soo, head of Hyundai Group's corporate restructuring committee. The move would leave Chung Ju Yung, the group's founder, with a 3% stake in South Korea's No. 1 auto maker, he added. Mr. Kim also said the sale is another example of the country's largest business group trying to restructure itself. Hyundai Group said it will use the proceeds to purchase three-year corporate bonds issued by Hyundai Engineering & Construction Co., which should ease the cash crunch at the ailing engineering unit, the head of restructuring said.

Sunday's announcement marks an about-face for Mr. Chung, who in late May increased his stake in Hyundai Motor in a bid to become the auto maker's largest shareholder. The May decision troubled investors and government officials, who have pressured the founding families of big business groups to improve corporate management.

-- (The Wall Street Journal)