Hyundai Motor to pay 4.96 trillion won for Hyundai E&C

    Hyundai Motor Group, South Korea's top automaker, agreed to pay 4.96 trillion won (US$4.4 billion) to take over a 35 percent stake in the country's biggest builder,sources said Friday.

    The price, agreed on with creditors of Hyundai Engineering & Construction Co. (E&C), represents a 2.74 percent discount from the carmaker's bid price of 5.1 billion. 

    The price readjustment came after Hyundai Motor Group had complained that it has found previously undisclosed bad assets held by the builder through due diligence it conducted after it was chosen as the buyer on Jan. 14.

   "The two sides have smoothly reached an agreement without big opinion gaps during the negotiation," an official at one creditor bank said, requesting anonymity.

   According to the source, the automaker had demanded that creditors, including Korea Exchange Bank, give it a 3 percent discount.

   Following the price agreement, creditors plan to sign the formal stock purchase agreement with Hyundai Motor around March 10, said the source.

   Hyundai Motor's takeover of Hyundai E&C came after creditor banks scrapped in December their previous deal with Hyundai Group, now a stand-alone industrial conglomerate previously affiliated with the auto-making group, to sell the top builder.

   After picking Hyundai Group as the preferred bidder in November for its higher price bid, creditors walked out of the transaction with the group, citing its insufficient financing ability.
(Yonhap)