Updated: LG Semicon – We will sue ADL
LG Semicon owes seven trillion won,US antitrust fears grow, foreign projects put on ice
The Korean press reported yesterday that LG was still pressing ahead with its plans to sue Arthur D Little (ADL), following a recommendation by the consultant that Hyundai have the lion’s share in a merged semiconductor company.
But frantic attempts made by the Federation of Korean Industries (FKI) to mediate in the row appear to have come to nothing. At the same time, the South Korean Ministry of Foreign Trade warned that any merger could result in a breach of US antitrust law, according to the Korea Herald. That newspaper also said that foreign buyers are now delaying confirming orders because of uncertainty over LG Semicon's liquidity.
The newspaper also claimed that all overseas investment plans are now on ice. That could be very bad news for the UK. Hyundai was to have built a fab here and LG has a large investment in Newport, Wales. Yesterday, LG Semicon posted a statement on its Web site by CEO Bon Joon Koo, which lashes out at ADL’s document of recommendation.
The FKI is attempting to build bridges between LG Semicon and Hyundai, but many observers regard this as a forlorn task. The South Korean government continues to threaten sanctions against LG for its intransigence. Earlier this week, major creditors said they would call in loans and refuse further money to LG Semicon unless it changed its stance. LG Semicon owes over seven trillion won and of that, nearly two thirds must be repaid within a year. ®