Hyundai Electronics Industries Co. (HEI) disclosed in Korea over the holiday weekend that the unit will speed up its planned spinoff from the parent chaebol and will seek to raise $3 billion in new loans and securities and asset sales in 2001.
Hyundai officials gave no new specific accelerated timetable for the spinoff of the electronics group, which originally was tentatively targeted for 2002. Financial analysts believed Hyundai Electronics hopes the move towards becoming a stand-along independent company will distance the operation from its troubled sister chaebol affiliates and increase investor confidence.
HEI itself has about $9 billion in outstanding debt that the firm wants to cut substantially next year. Officials said they have already arranged a $435 million loan from Citibank and four Korean banks. The firm also hopes to raise another $435 million in additional domestic loans next year, as well as raise $1.15 billion in bond sales during the second half of 2001. Another $425 million would be raised by sales of assets and sale of some accounts receivables.
Hyundai Electronics' debt problem is exacerbated by a large amount of three-year bonds maturing next year that originally were issued after the 1997 financial crisis.