Hyundai Securities sets back AIG sale


Korea's main Kospi index ended 2001 up 37 percent, thanks in part to government-driven reforms like the AIG sale

By staff and wire reports

SEOUL, South Korea -- Hyundai Securities Co. on Monday set back a deadline to sell controlling stakes in itself and two other Hyundai affiliates to an American group.

Hyundai, South Korea's third- largest brokerage, has spent almost two years in talks with a group led by American International Group Inc., the world's largest insurer.

The U.S. group, which also includes investment house W.L. Ross & Co., agreed in August to spend 1.1 trillion won ($834 million) for controlling interests in the three companies.

But the deal hit a hitch almost as soon as it was announced. Now its completion has been put back.

Deal extended to March

"The deadline has been extended until the end of March," a spokesman for Hyundai Securities told Reuters news agency.

"We cannot comment on any other details of the talks at this moment," he said.

The period for exclusive talks with the AIG group expires on Monday but regulators said the talks could be extended.

"If AIG accepts, talks would continue with the exclusive negotiating time frame extended," Korea's regulatory Financial Supervisory Commission said in a statement.

AIG walked out of due diligence in October. But it has since dropped several demands and offered to buy common instead of preferred shares in Hyundai Securities.

Hyundai said the two sides are discussing the price of the shares and other details.

Reforms help boost stock prices

An FSC official told reporters last week that AIG and Hyundai were narrowing differences that have blocked a final deal despite two earlier memorandums of understanding.

The latest MOU called for the AIG-led group to take a controlling stake in Hyundai Securities while the government would inject 900 billion won into two ailing Hyundai Securities trust companies.

The other two companies are Hyundai Investment Trust and Securities and Hyundai Investment Trust Management.

Thanks in part to efforts by the Korean government to offload debt-laden Korean companies, South Korean stocks gained 37 percent in 2001, one of Asia's strongest performances.

Reuters contributed to this report.