Hanbo Steel sale touted for next week

SEOUL, South Korea (CNN) -- AK Capital is in the final stages of talks to buy Korean producer Hanbo Steel, according to a report.

A $370 million deal will likely be wrapped up next week, the Chosun Ilbo stated Thursday, citing government sources.

The two companies signed a memorandum of understanding in March for $410 million. But the newspaper reports the price has since dropped.

Korea Asset Management Corp., the government agency overseeing the sale, said Thursday that no deal had been made.

Creditors have supported Seoul-based Hanbo Steel for years while looking to sell the company. It collapsed under $4.4 billion in debts during the Asian financial crisis.

On sale since 1998

Some observers trace the beginning of South Korea's crisis to the Hanbo collapse, which came after a sharp drop in the value of the Korean won against the dollar.

The International Monetary Fund ultimately came up with a $55 billion aid package for the country. Korea has been trying to arrange Hanbo's sale since 1998.

AK Capital is a special-purpose company set up for the merger by Kwon Ho-sung, the son of the former owner of Union Steel, Kwon Chul-hyun.

It is one of two companies that bid on Hanbo Steel last December, but is the frontrunner ahead of CHB Steel.

Hanbo operates one of the world's biggest steel plants in the city of Tanjin, on Korea's west coast.