Hyundai builder`s stake in shipbuilder crucial to auction

Creditors of Hyundai Engineering & Construction have proposed splitting and selling the company’s 8.3-percent stake in Hyundai Merchant Marine to the market or the National Pension Service, making the share crucial in the bidding for the builder.

The proposal released Monday said the management right of Hyundai Group will be guaranteed by selling Hyundai Merchant Marine’s stake to a third party even if the Hyundai-Kia Automotive Group takes over the builder.

Since the ugly war over the builder’s purchase will continue if the management right of Hyundai Group is threatened, the creditors provided Hyundai Group with a way out.

If the 8.3-percent stake is taken over by the automotive group, other Hyundai affiliates including Hyundai Heavy Industries will own up to 39.23 percent of Hyundai Merchant Marine, which will be about the same as those of shareholders who favor Hyundai Group (42.77 percent).

The creditors’ proposal cannot be dismissed by Hyundai Group vis-a-vis protecting its management right. If Hyundai Group accepts the proposal, the deal can be closed easily.

Hyundai Group, however, simply dismissed the proposal as not worth reviewing Tuesday. Some say the conglomerate cannot reject the proposal because if the 8.3-percent stake is taken over by the automotive group, this could threaten Hyundai Group’s management right.

The automotive group also said, “It`s too early to announce our position at a time when we haven’t been selected as a preferred bidder.”

The prevailing view is that the proposal will be rejected since the automotive and Hyundai groups are at odds with each other. A Hyundai Group source said, “We fought over Hyundai E&C so much. Do you think reconciliation will be easy now?”

Some believe that Hyundai Group will reject the proposal as it jumped into this bidding not just for Hyundai Group but also for the automotive group.

If the two conglomerates do not agree, a court will decide the bidding. Some expect both sides to accept the proposal to avoid such a situation.

In other words, the proposal can be accepted for a greater cause since it would look bad if Chung Mong-koo, the automotive group’s chairman and the eldest son of the Hyundai owner family, continues his feud with his sister-in-law and Hyundai Group Chairwoman Hyun Jeong-eun.

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