Monday, June 6, 2011

Hyundai Group Affiliates Fall on Documentation

By Vincent Lee

Hyundai Engineering and Hyundai Group affiliates’ shares were down sharply after Hyundai Group said it submitted documentation for a 1.2 trillion won (US$1.05 billion) loan it is using to finance a $5 billion acquisition of a controlling stake in Hyundai Engineering.

Hyundai Group says the document, endorsed by lender Natixis, proves that the loan is unsecured and isn’t backed by any Hyundai Group affiliates’ shares or by Hyundai Engineering shares.

But the market continues to worry that Hyundai Group affiliates and Hyundai Engineering will suffer going forward, stemming from heavy financing burdens on Hyundai Group to pay for the acquisition.

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