Chip Maker Hyundai Has Plan to Reduce Debt

Computer chip maker Hyundai Electronics Industries Co. said it was experiencing serious financial difficulty and unveiled a plan to raise $2.9 billion by the end of 2001 to reduce debt. Hyundai Electronics is the latest affiliate of South Korea’s largest conglomerate, Hyundai, to acknowledge a debt crisis. Hyundai’s woes coincided with spreading economic concerns. The South Korean currency dipped 17 won to 1,193 won to the U.S. dollar, its lowest level in more than a year, despite the government’s appeal for market calm. In the last 10 months, the main stock price index has fallen by half to a little over 500. The Hyundai chip maker said that it will secure a $842-million syndicated loan to be managed by Citibank of the United States. It said it also will issue $1.1 billion in corporate bonds, sell $442 million in assets and securities and secure $418 million through sales of bonds held by overseas units and $124 million in fresh loans from creditor banks. Hyundai Electronics is struggling with $9.7 billion in debt, a large portion of it incurred when it took over the semiconductor operation of LG, a South Korean conglomerate, in a government-sponsored industry shakeout last year.

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