Press Releases - Financial Services Commission

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Mar 10, 2004

Bank Loans Classified as Substandard or Below Rise Modestly in 2003

Figures compiled by the FSS show that bank loans classified as substandard or below (SBLs)—substandard, doubtful, or presumed loss—totaled 18.6 trillion won at the end of 2003, up 3.5 trillion won from 15.1 trillion won a year earlier. New SBLs during 2003 totaled 35.2 trillion won, compared with 31.7 trillion won for SBLs that have been resolved or otherwise cleaned up during the year. The ratio of SBLs to the total outstanding loans rose to 2.62% from 2.33% a year earlier. The ratio for non-performing loans was 1.98% for 2003.A breakdown of the SBLs shows that SBLs from corporate borrowers totaled 11.7 trillion won (2.69%), compared with 4.3 trillion won (1.74%) for household SBLs and 2.6 trillion won (10.09%) for credit card SBLs.During 2003, domestic banks resolved or otherwise cleaned up SBLs totaling 31.7 trillion won—11.4 trillion won during the first half of the year and 20.3 trillion won in the second half. Loan write-offs came to 11.2 trillion won or 35.5% of the 31.7 trillion total in 2003, compared with 7.8 trillion won (38.5%) in 2002.As of the end of 2003, Chohung and Kookmin were the only domestic banks whose SBL ratio exceeded 3%. The SBL ratio for nine banks rose while that for eight banks fell in 2003 (see the attached table for the complete list of the banks and their ratios for 2003). The FSS expects all domestic banks to be able to hold their SBL ratio below 3% for 2004 and plans to take supervisory actions to encourage banks to do so.* Please refer to the attached PDF for details.
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Dec 16, 2003

BIS Capital Adequacy Ratio of Domestic Banks : September 2003

The BIS capital adequacy ratio of domestic banks as of the end of September this year averaged 11.32%, compared with 10.82% at the end of March and 11.03% at the end of June. Slower growth of risk-weighted assets (6.3% during the first nine months of this year compared with 14.9% a year earlier) as well continuing capital growth (6.2% since the beginning of the year) are said to have contributed to the quarter-to-quarter increases. The domestic banks’ 11.32% average is comparable to the capital ratios of Japanese (8.9%), German (11.2%), U.K. (11.6%), and U.S. (13.0%) banks.* Please refer to the attached PDF for details.
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Nov 28, 2003

Government to Sell its Stakes in Hyundai Investment & Securities and Hyundai Investment Trust Management to Prudential Financ

The government announced on November 25 that it had reached an agreement with Prudential Financial, Inc. (Prudential) to sell an 80% equity in Hyundai Investment Securities Co., Ltd. (HITC) and Hyundai Investment Trust Management Co., Ltd., a subsidiary of HITC, that the government is to hold after HITC is recapitalized.Under the agreement reached with Prudential, the sale is to be closed by early 2004 after HITC is restructured and recapitalized by the government-run Korea Deposit Insurance Corporation (KDIC) through asset purchases and capital injections. Valuation for the 80% stake to be acquired by Prudential is to be determined at the time of closing based on the cash flows and other business results of HITC for the previous 12-month period. KDIC will continue to hold the remaining 20% stake in HITC with an option to sell those shares to Prudential during a three- year period starting three years after the closing of the sale, whereas Prudential will have the option to buy those shares from KDIC and raise its equity stake in HITC during the same period. The price at which either option may be exercised is to be determined in a manner similar to the valuation to be used for pricing the initial 80% acquisition by Prudential. The agreement also gives Prudential a three-year customary indemnification period following the closing of the sale against potential losses and liabilities.* Please refer to the attached PDF for details.
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Sep 25, 2003

FSC/FSS to Host 28th IOSCO Annual Conference

The FSC/FSS will host the 28th Annual Conference of International Organization of Securities Commissions (IOSCO) in Seoul from October 14 to 17. IOSCO was founded in 1975 to promote efficient and prudential regulation of the world’s capital markets and to establish international standards for the supervision of securities transactions. Since its founding, IOSCO has evolved into a major financial supervisory organization with 171 members from 102 nations. The FSC/FSS has been an ordinary member of IOSCO since 1984. The Korea Stock Exchange and the Korea Securities Dealers Association are affiliate members.The theme for this year’s conference is “New Challenges for Securities Markets and Regulators.” Approximately 400 participants, including senior securities regulators from the member supervisory organizations and individuals active in international financial markets, are expected to be present at the conference.* Please refer to the attached PDF for details.
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Sep 09, 2003

BIS Capital Adequacy Ratio of Domestic Banks

The BIS capital adequacy ratio of domestic banks as of the end of June this year averaged 11.00%, continuing a modestly downward movement that began after reaching 11.68% at the end of 2001. Rising risk-weighted assets relative to bank capital most likely contributed to the drop in the BIS capital ratio. But the end-of-June average is higher than 10.82% at the end of March and suggests the BIS capital ratio will continue to move within a narrow range. The jump in the second quarter was helped by a slowing pace of risk-weighted assets and bank capital increases totaling 2.268 trillion won.* Please refer to the attached PDF for details.
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Sep 17, 2002

Bad Loans Fall Sharply in the Second Quarter

Figures compiled by the 1,565 domestic financial institutions show that, as of the end of the second quarter this year, loans classified as substandard or below (SBLs)—substandard, doubtful, or presumed loss loans—stood at 32.1 trillion won, 5.9 trillion won or 15.5% less than the first quarter total of 38.0 trillion won. The net SBLs or SBLs net of loan loss provisions fell 2.3 trillion won from the first quarter to 13.1 trillion won. Similarly, the ratio of SBLs to the total outstanding loans fell to 4.2% from 5.1%, while the ratio of net SBLs to net total loans (total loans net of loan loss provisions) fell to 1.8% from 2.2% at the end of the first quarter. The amount of non-performing loans (NPLs)— generally loans 3 months or more past due and loans in nonaccrual status—also fell 5.0 trillion won to 29.1 trillion won or 3.8% in the second quarter from 34.1 trillion won or 4.6% in the first quarter. Most of the drop in SBLs in the second quarter came from 4.6 trillion won in loan write-offs, 3.1 trillion won in loan recoveries, and 1.6 trillion won in loans that were reclassified to normal or precautionary from substandard, doubtful, or presumed loss. By lender, banks posted the largest quarterly drop of SBLs at 3.9 trillion won (21.5%), and were followed by non-banking lenders at 1.2 trillion won (9.2%). Insurance and securities companies lowered SBLs by 0.2 trillion won (8.3%) and 0.6 trillion won (13.3%), respectively. Domestic banks held the lowest SBL ratio at 2.4%, and were followed by insurance companies at 4.6% and other non-banking lenders at 10.4%. Securities companies and investment trust management companies (ITMCs) on the other hand posted SBL ratio of 45.9% for the quarter, mainly due to unusual one-time events such as the assumption of bad assets as a result of a merger between a securities firm and a merchant bank.BanksAs of the end of the second quarter, 20 commercial and specialized banks held 14.2 trillion won in SBLs, down 3.9 trillion
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Sep 12, 2002

Improved Financial Structure of Domestic Companies Listed in KSE and KOSDAQ Five Year After the 1997 Financial Crisis

A recent FSC/FSS analysis on the financial structure of domestic companies publicly traded in the Korea Stock Exchange (KSE) and the KOSDAQ showed an overall improvement in debt-to-equity ratios, financial expenses, and profitability in the past five years following the 1997 Asian financial crisis.The analysis indicated that, as of the end of March this year, the debt-to-equity ratio of KSE- and KOSDAQ-traded manufacturing companies had fallen to 174.4% from368.6% at the end of 1997, a level comparable to that found in most leading economies and a clear sign of the financial stability of domestic companies. The principal causes for these positive developments can be traced to the large capital increases through stock issuance during 1998 to 1999 and increases in cash reserves and retained earnings driven by profit-focused business management and strategies beginning in 2001.The drop in net financial expenses -to -sales ratio of domestic companies—from 5.1% at the end of 1997 to 3.1% at the end of the first quarter of 2002 on the back of improved financial strength—was one of the key reasons behind the recent surge in corporate profitability.The emerging trend toward financial stability and improving profitability of domestic companies has been particularly striking in the first half of this year, and there are reasons to believe that this trend is not a temporary phenomenon, but a reflection of the strength of fundamentally restructured domestic companies.As shown in the table below, a comparison of the debt-to-equity ratio, interest coverage ratio, and operating income-to-sales ratio of KSE- and KOSDAQ-traded companies (excluding financial service companies) for the first half of this year versus the first half of 2001 clearly points to the significantly improved profitability and debt-servicing ability of domestic companies.It is also noteworthy that, unlike in the past when corporate profitability was often exaggerated by the sheer size of businesses, the rec
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Aug 14, 2002

Investigation Findings and Disciplinary Action against UBS Warburg and Merrill Lynch Seoul Branch Offices

The FSS conducted partial on-site examinations of the local branches of Merrill Lynch from April 19 to May 10 and UBS Warburg from May 21 to June 17 to investigate allegations of improper disclosures by analysts at these two branches. After a thorough review of the findings, on August 13, 2002, the FSS decided to take following disciplinary action against the subject firms and analysts for a number of violations that have been found through the investigation. These measures will be officially enforced after the FSC approval on Friday, the 16th.- The Seoul Branch of UBS Warburg will receive a “severe disciplinary warning,” which means, in case of a repeated violation, the company can be subject to a business suspension.- The Seoul Branch of Merrill Lynch will receive a “disciplinary warning,” one step below the “severe disciplinary warning.” - UBS Warburg: 15 employees in total, will be penalized, one of whom will receive a severe disciplinary warning, one a suspension of business activity for a limited period of time, four a salary reduction, and the remaining nine a censure.- Merrill Lynch: 6 employees will be penalized; one will receive a suspension of business activity, one a salary reduction, and the remaining four a censure.* This is the first time since its foundation that the FSS has imposed sanctions against branch offices of foreign securities firms and their individual staff of measures above a salary reduction.The FSS will continue to carry out investigations on both domestic and foreign securities firms for any possible unlawful business conduct in order to reinforce market discipline.* Please refer to the attached PDF for details.
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May 09, 2002

Retracting Chairman`s Statement on Prudential Financial Inc.`s Due Diligence on Hyundai Financial Units

The FSC would like to retract Chairman Lee, Keun-Young’s statement made this morning on May 9, 2002, saying Prudential Financial Inc. had begun due diligence on three Hyundai financial companies.Chairman Lee meant to say that Prudential had expressed its interest in doing so, but the company has not officially proposed any specific details on this matter. * Please refer to the attached PDF for details.
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Apr 30, 2002

A Cooperative MOU between the Market Watchdogs of Korea and France Was Signed in Paris

A cooperative MOU between the market watchdogs of Korea and France was signed in Paris.The FSC signed a cooperative MOU on April 30, 2002 in Paris, with the Commission des operations de bourse (COB), the Market supervisory authority of the Republic of France. This MOU, signed by Standing Commissioner of the FSC, and Chairman of the COB, will provide a basis to set up and implement a system for mutual assistance and exchange of information between both authorities in order to facilitate the performance of the functions they are entrusted with in the fields of investor protection and market discipline.The conclusion of the MOU is in line with the recommendations made by international organizations such as the BIS and IOSCO, for mutual cooperation between supervisory authorities, whose jurisdictions have cross-border financial institutions. The FSC has been an active participant of international regulators’ meetings since its establishment in 1998 and has formed MOUs (or high-level dialogue agreements) with supervisors in several jurisdictions including the U.K., Germany, Japan, China, and Vietnam.Following the signing ceremony, Standing Commissioner YANG, Cheon-Sik had a meeting with Chairman Michel Prada, to exchange their views on both countries’ financial supervisory systems. Mr. Yang is also scheduled to meet with officials from the French bank supervisory agency, Commission Bancaire (CB), to discuss ways of concluding a cooperative tie.* Please refer to the attached PDF for details.
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Apr 25, 2002

High-Level Dialogue between the FSA of the U.K. and the FSC/FSS of Korea held in Seoul

The third annual high-level bilateral dialogue between the Financial Services Authority (FSA) of the U.K., and the Financial Supervisory Commission (FSC) and the Financial Supervisory Service (FSS) of Korea was held in Seoul, Korea, on April 24. Mr. Howard Davies, the Chairman of the FSA, led the U.K. delegation to Korea. Mr. Keun-Young Lee, the Chairman/Governor of the FSC/FSS led the FSC/FSS. The bilateral dialogue covered recent regulatory approaches and this year’s supervisory agenda of both countries as well as specific supervisory issues relating to Korean financial institutions operating in the U.K., and the U.K. financial institutions operating in Korea. The meeting also included discussions on the New Basel Accord planned to be introduced in 2006, consumer protection, supervisory issues related to e-money, and investigation of unfair securities trading. The meeting was very successful with both supervisory authorities agreeing to maintain a close dialogue on regulatory developments in both countries. The next high-level dialogue is set to be held in London in 2003. * Please refer to the attached file for details.
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Apr 15, 2002

Removal of 5 Banks from Prompt Corrective Action (PCA)

During the second phase of financial restructuring in the latter half of 2000, the government and FSC/FSS provided and pursued management normalization plans for eight banks under PCA (Korea Exchange, Chohung, Hanvit, Peace Bank of Korea, Cheju, Kyongnam, Kwangju and Seoul) based on the evaluation results of the ad hoc management evaluation committee. Following a recent evaluation of these banks’ performance since the plans were implemented – excluding Peace Bank, whose banking business was merged into Hanvit Bank in late 2001 – the FSC/FSS concluded 5 of these banks would be removed from PCA. As part of their normalization plans, 6 of the 8 banks excluding Korea Exchange Bank and Chohung Bank underwent a complete capital reduction. Afterward, they were injected with a second round of public funds in the form of equity participation in December 2000 and capital contributions in September 2001, totaling 7.1 trillion won. As a result of the second phase of restructuring in the banking sector, management performance of these banks such as financial soundness significantly improved through injection of public funds and self-restructuring efforts. A foundation of “clean banks” has been established through clearance of large amounts of ailing assets, and stabilization of financial markets and restoration of the intermediary function of financial companies have contributed to the recovery of the real economy. The evaluation of the 8 banks’ overall performance as of the end of 2001 by the FSC/FSS included a comprehensive review of these banks’ satisfaction of the basic requirements for removal from PCA such as a minimum BIS capital adequacy ratio of 8% and a grade 3 or higher on the CAMELS evaluation, as well as their management improvements such as advancements in corporate governance and introduction of a risk management system. The FSC/FSS concluded from the evaluation results that 5 banks (Korea Exchange, Chohung, Hanvit, Kyungnam and Kwangju) would be rem
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Mar 21, 2002

Bad Loans Sharply Fall in 2001

As of the end of 2001, the total amount of substandard or below loans (SBLs) at 1,550 financial companies stood at 35.1 trillion won, a drop of 29.5 trillion won (45.7%) from the 64.6 trillion won recorded at the end of 2000. The net amount of SBLs— total SBLs less total loan loss provisions—also fell 16.3 trillion won to 15.3 trillion won. As a result, the proportion of SBLs to total loans fell 5.0 percentage points from 10.4% to 5.4%, and the ratio of net SBLs to net total loans (total loans less loan loss provisions) fell 2.9 percentage points from 5.4% to 2.5% during the period. The total amount of non-performing loans (NPLs)—the sum of loans 3 months or more past due as well as loans in nonaccrual status—also fell 18.9 trillion won to 31.3 trillion won in 2001.Overall, the yearly drop in SBLs was mainly due to the disposal of bad loans through ABS (16.7 trillion won), extensive write-offs (14.8 trillion won) and loan recovery (10.0 trillion won). * Please refer to the attached file for details.
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Dec 11, 2001

Request for Correction of FT Article

[Request for Explanation and Correction of Financial Times Article Titled “Pressure on for Hynix, Micron Deal.”]The Financial Times article dated 12/11/01 and titled “Pressure on for Hynix, Micron Deal” stated that:- The FSC is quoted as saying “the FSC is very positive about the talks because if Hynix’s bad debt had to be written off, a couple of banks might have to be wiped out. It would be a severe shock to the financial system.”- “The least we can expect is some sort of strategic alliance so they can share research and development costs.”These statements are misquoted; therefore, the following Financial Times’ statement does not have any factual basis: “Failure by Hynix Semi-conductor and Micron Technology, the memory chipmakers, to forge an alliance could lead to a collapse of several South Korean banks, according to the country’s financial watchdog…”Therefore, we would like to request a correction of this article.* Please refer to the attached file for details.
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Dec 05, 2001

Bad Loans Fall in the 3rd Quarter of 2001

For the third quarter ending September 30, 2001, the total amount of substandard or below loans (SBLs) at 1,557 financial companies stood at 46.3 trillion won, a drop of 3.5 trillion won (7.0%) from the 49.8 trillion won recorded at the end of the second quarter ending June 30, 2001. The net amount of SBLs— total SBLs less total loan loss provisions— also fell 1.4 trillion won to 22.2 trillion won. As a result, the proportion of SBLs to total loans fell 0.7 percentage points from 8% to 7.3%, and the ratio of net SBLs to net total loans (total loans less loan loss provisions) fell 0.3 percentage points from 4.0% to 3.7% during the period. The total amount of non-performing loans (NPLs)—the sum of loans 3 months or more past due as well as loans in nonaccrual status—also fell 1.6 trillion won to 37.9 trillion won during the period.Overall, the third quarter drop in SBLs was mainly due to the continued disposal of bad loans through asset-backed securitization (ABS), extensive write-offs and loan recovery. During the period, domestic lenders disposed of 3.3 trillion won in SBL through ABS, wrote off 2.9 trillion won, and recovered an amount of 1.9 trillion won.By lender, banks accounted for 27.4 trillion won (59.2%) of the 46.3 trillion won in total SBLs and were followed by non-banking lenders with 12.2 trillion won (26.3%). Insurance and securities companies accounted for 2.9 trillion won (6.3%) and 3.8 trillion won (8.2%), respectively.In addition, domestic banks recorded the lowest ratio of SBLs at 5.0%, followed by insurance companies at 6.5%, non-banking lenders at 30.0% and securities companies at 54.3%.BanksAs of the end of the third quarter, 22 commercial and specialized banks held 27.4 trillion won in SBLs, which also reflects all potential losses as defined under Forward Looking Criteria (FLC). This is 2.8 trillion won less than the total amount at the end of the previous quarter, and a decrease from 5.7% to 5.0% in the proportion of SBLs to total loa
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May 22, 2001

High-Level Dialogue between FSA of the UK and FSC/FSS of Korea Held in Seoul

The second annual high-level bilateral meeting between the Financial Services Authority (FSA) of the UK, and the Financial Supervisory Commission (FSC) and the Financial Supervisory Service (FSS) of Korea was held in Seoul, Korea on May 21-22. Mr. Keun-Young Lee, Chairman/Governor of the FSC/FSS, and Mr. Michael Foot, Managing Director of the FSA, led the delegation of each authority. The discussions covered recent developments in the integration of financial supervisory systems in both countries, as well as specific supervisory issues relating to Korean financial institutions operating in the UK, and the UK financial institutions operating in Korea. The meeting also included discussions between the two authorities on a new risk assessment model, preparations for the introduction of the New Basel Accord in 2004, and the regulatory implications of the recent trends towards financial consolidation and electronic finance. The meeting was very successful with both sides agreeing to maintain a close dialogue on regulatory developments in the UK and Korea. The next high-level dialogue will be held in London in 2002. * Please refer to the attached file for details.
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Apr 13, 2001

The Major Policy Objectives of FSC for 2001

1. Main Policy Direction The financial industry is increasingly shaping the back-bone of knowledge-based economy of the 21st century of global and digital age. Fully recognizing such trend, financial regulatory authorities have taken policy directions which are to ensure strengthening the financial industry for the stable and sound financial markets and future economic growth. Accordingly, the government has shifted its focus from government-led restructuring policies to market-oriented approaches for continuous restructuring financial markets. Further, financial institutions will be encouraged to be more actively engaged in “software” reform to strengthen profitability and competitiveness. 2. Continuous Financial and Corporate Restructuring Reform in the Financial Sector• Preventive Supervisory and Prompt Corrective Action Measures: The terms and conditions of Management Improvement Arrangement, which is to be signed between ailing financial institutions and authorities, will be intensified to prevent managerial risk before PCA is enforced. • Continuing Reduction of Bad Loans: By monitoring commercial banks’ progress, on quarterly basis, with their efforts to reduce the ratio of substandard and below to total loans to the targeted 5% or below by the end of this year• Bank Mergers Among Sound Banks: To be more globally competitive by achieving greater economies of scale and by creating universal banking system The merger trend has been set off by the financial holding company and the merger between Kookmin Bank and Housing Commercial Bank (HCB), and other banks are encouraged to follow suit. Reform in the Corporate Sector• Effective Credit Risk Evaluation: To activate the corporate credit risk assessment system in full scale, by which creditor banks can assess credit risk of each of their debtor companies for the prevention of further increase of ailing assets, and, when necessary, for the timely exit of non-viable companies from the market The monthly
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Mar 20, 2001

Response to News Media Reports Concerning Financial Aid to Hyundai Group

In response to several news media reports that the decision by Hyundai creditor banks to provide additional liquidity support to Hyundai Electronics Industries Co. (HEI), Hyundai Engineering and Construction Co. (HEC), and other Hyundai subsidiaries amounted to the granting of special favors to the Hyundai Group, the FSS verified the following issues with the creditor banks:1. Financial Support to HEI and Progress of Self-Rescue PlanUnder a mutual agreement, the financial support to be provided by the creditor banks to HEI can be divided into loans under credit lines, ordinary loans and credit access, and syndicated loans.During a series of meeting held between late-November 2000 and mid-March 2001, the creditor banks agreed to restore HEI’s credit lines up to previous limits. For ordinary loans and credit access, the creditor banks sought to resolve the liquidity shortages experienced by HEI through extension of debt maturity.However, due to protracted disagreements among several creditor banks over their share of liquidity support, the creditor banks convened an emergency meeting on March 10th in order to resolve their differences and strike a new agreement concerning the portion of liquidity support to be provided by each creditor bank.With regard to the syndicated loan that was lead-managed by Citibank and announced on November 28, 2000, it should be noted that only KRW 800 billion of the original target of KRW 1 trillion was successfully raised due to the non-participation of several creditor banks. The decision to proceed with raising the remaining KRW 200 billion is entirely up to Citibank as the lead manager of the syndicated loan. The FSSneither participated in the March 10th creditor bank meeting nor engaged in any discussions in regard to the meeting.Meanwhile, the decision by creditor banks to provide liquidity support to HEI was made on the strict condition that it would fully execute the self-rehabilitation plan announced by the Hyundai Group in Janu
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Mar 15, 2001

Regarding the speculation raised by The Chosun Daily over "anomalous support for Hyundai....."

With regard to the planned sale of waste disposal business units by Hyundai Electronics Industries to France-based Vivendi Co., the FSS had no prior knowledge of the sale and the speculations raised by the vernacular daily, Chosun Daily, that the government intervened in the sale are unfounded and untrue.In order to determine whether any irregular or unfair support was extended to HEI for the sale, the FSS questioned Hana Bank, which is lead-managing the syndicated loan arrangement for the purchase of the Hyundai waste disposal business by Vivendi Co. According to Hana Bank, six banks agreed to participate in the syndicated loan and contribute a total of KRW 146.6 billion towards the purchase, while Vivendi Co. would contribute KRW 83.2 billion. It has been confirmed to the FSS that each of the six banks decided to participate in the syndicated loan based on the commercial merits. The banks participated in a competitive bidding process for the syndication in consideration of its profit potential and after conducting careful assessments of business feasibility. The sale of the waste disposal units by Hyundai Electronics Industries is a part of its self-rehabilitation plan, which was announced on January 17, 2001. Vivendi Co. was selected as the preferred buyer due to a lack of interested domestic buyers.Participation by banks in similar projects or sales -- known as acquisition financing -- is a common business practice in financial markets and does not in any way represent anomalous support for Hyundai Electronics Industries by the creditor banks.* Please refer to the attached file for details.
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Mar 13, 2001

Response to Media Coverage on Hyundai Group Companies

On Saturday, March 10, creditor banks to the Hyundai Group convened an emergency meeting with executives from Hyundai Electronics Industries, Hyundai Engineering Construction, Hyundai Petrochemical, and Hyundai’s financial advisor, Salomon Smith Barney, in order to discuss liquidity problems facing the Hyundai units and to determine feasible methods to resolve them. During the meeting, the participants reaffirmed the viability of the concerned companies and reviewed the progress of self-rescue plans that are being implemented at each firm. In addition, the creditor banks reaffirmed and finalized each bank’s share of liquidity support to Hyundai subsidiaries, which had been agreed upon a few months ago.At the request of the creditor banks, FSS representatives attended the meeting only to ensure the implementation of follow-up measures by the creditor banks and the Hyundai units, and not to influence the creditor banks or their decision to extend additional credits to the Hyundai companies.1. The purpose of the meeting The purpose of the meeting was to adjust and finalize the already agreed specific share of liquidity support to be assumed by each creditor bank, and to devise a timely implementation plan that could mitigate market uncertainties surrounding the companies; it was not to extend additional loans. Between January and March 2001, the creditor banks had already agreed to raise the purchase limit on export bills (on D/A basis) by US$ 600 million for Hyundai Electronics Co. and to provide US$ 400 million in credit guarantees to Hyundai Engineering and Construction Co. However, both companies have been suffering from liquidity shortages due to disagreements among the creditor banks concerning the relative share of liquidity support that each creditor bank had to assume. 2. The criticism of government interferenceWith respect to the Hyundai Group, the creditor banks voluntarily held numerous meetings in the past and agreed to provide financial support to Hyu
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