Hyundai to sell off financial business to raise cash

SEOUL, Dec. 22 (Yonhap) -- Hyundai Group announced Sunday that it will sell off its financial businesses, including Hyundai Securities Co., to improve its liquidity.

The conglomerate said it will raise 3.3 trillion won (US$3.1 billion) by selling its three financial units and other assets such as Banyan Tree hotel in a bid to pay off its debts and prepare for future financial demand.

"Our cash holdings are enough for the first half of next year, but we took pre-emptive and voluntary measures to dispel concerns from markets (over our cash flows)," said an official at the business group.

The sales of its financial companies, which are expected to fetch up to 1 trillion won, are aimed at resolving its liquidity crunch and regaining the trust of the markets, Hyundai Group said.

The group is putting Hyundai Securities and unlisted firms Hyundai Asset Management Co. and Hyundai Saving Bank up for sale.

Hyundai Group also plans to sell its luxury hotel Banyan Tree in downtown Seoul for at least 340 billion won.

The group will raise nearly 2 trillion won by disposing of assets of Hyundai Merchant Marine Co., including its bulk business division, vessels and properties both at home and abroad.

In order to secure more than 320 billion won, Hyundai Merchant will borrow money overseas, while Hyundai Elevator Co. will float new shares and Hyundai Logistics Co. will be listed on the Seoul bourse.

Hyundai Merchant Marine has raised 56.3 billion won by selling its container ships in recent weeks.

Hyundai Group is pushing for restructuring its affiliates, including Hyundai Asan Corp., the operator of the inter-Korean Mount Kumgang tour program that has been shut down since 2008 after a South Korea female tourist was shot dead.

Once its self-rescue plan is completed, the group predicts that it will be able to pay off debts of 1.3 trillion won and bring down the average debt ratio of three units-- Hyundai Merchant Marine, Hyundai Elevator and Hyundai Logistics -- to the upper 200 percent range from 493 percent as of end-September this year.

Hyundai Group said its plan to sell the three financial units is a strategy to focus its resources and abilities on the conglomerate's core businesses -- Hyundai Merchant Marine, Hyundai Logistics, Hyundai Elevator and Hyundai Asan.

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