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Hyundai seeks $3bn to split from parent

May change name too

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Hyundai Electronics Industries is to raise up to Won 3.5 trillion ($3 billion) to help it separate from its parent company early next year, the Korean Dramurai said yesterday.

"We are even considering changing the company name," said Hyundai Electronics Industries' president and CEO, Park Chong-sup.

Hyundai's plan is to issue $1.16 billion worth of corporate bonds, make a further $450 million by selling assets and stock, and raise $857 million through syndicated loans.

The proceeds will be used to help clear the company's $5.44 billion in debt - most of it, says Reuters, down to previous corporate bond issues which are due to mature at the end of next year.

Hyundai - the world's biggest DRAM manufacturer - is also looking to sell a 12 per cent stake in the company, which is currently owned by other operations in the Hyundai Group and the Group's founder.

"The synergy effect would be the most important factor in deciding on a buyer, who may be a foreign company," said Park. "If we try our best, separation from the group by the first quarter [of next year] would be possible."

With good cashflow, the company said, it will be able to eliminate 90 per cent of its debt in two years. Of course, 'good cashflow' depends on increasing DRAM prices, but Park is confident that the global DRAM market will rally during the next two quarters.

Hyundai Electronics Industries treasurer and VP Chung Chang-see said the company will see sales of $7.9 billion in 2000 and $9.7 billion in 2001. Sales in the three months to September, Q3, rose to $2.1 billion from $1.86 billion in the second quarter.

Semiconductors accounted for about 84 per cent of Hyundai's sales. ®

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