Hyundai Group's Deal to Buy Former Contracting Unit Under Fire from Rival
Hyundai Group landed a preliminary $4.8 billion deal to purchase South Korea's Hyundai Engineering and Construction Co., that nation's largest contractor, but concerns over whether Hyundai Group can pull the financing together is raising questions among top investors, according to a Reuters report.
Hyundai Group is leaning on Natixis, a French investment bank, to provide it with a $1.2 trillion won ($1.03 billion) loan. Hyundai says its banker has agreed to extend the loan without imposing collateral, and that its deposit was good, Reuters reported.
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Nonetheless, Hyundai Engineering's large shareholders were reluctant to sign off on the deal over concerns about the company's funding plans, the report noted, pointing out that Hyundai Group's rival bidder, Hyundai Motor Group, had stirred up the pot by raising questions about Hyundai Group ability to come up with the high purchase price.
All three firms were at one time part of the Hyundai Group, before the conglomerate spun off many of its businesses in the late 1990s and early 2000s.
