SEOUL, MAY 17: Daewoo Corp, the flagship of what was South Korea's second largest conglomerate, said on Wednesday that the group was gearing up for a split into three companies handling trading, construction and liabilities.Daewoo Corp and 11 other core affiliates have been steered since last August by creditors who provided them with emergency funds a month earlier.Creditors agreed in November to split up Daewoo Corp, the construction and trading unit of Daewoo Group, into the three units.A due diligence report put Daewoo Corp's liabilities at 34.02 trillion won ($30.5 billion), more than twice its 16.66 trillion won in assets.In a surprise announcement earlier on Wednesday, the Korea Stock Exchange said Daewoo Corp was South Korea's top company in net profits terms in the first quarter of 2000, returning 7.9 trillion won. That figure was five times greater than that of second-place Samsung Electronics.However, Daewoo officials and analysts said the huge profit was only a paper gain because Daewoo Corp had placed the exemption of interest payments - which amounted to nine trillion won - as an extraordinary gain in its income statement."So without the extraordinary gain from the interest payment exemption, Daewoo Corp posted a loss in the first quarter," said an analyst at Good Morning Securities.Domestic creditors of Daewoo Corp, in a move to resuscitate the firm, have agreed to convert 966 billion won in debt to equity, apply the prime interest rate to 4.42 trillion won in loans and exempt interest payments on loans of 18.58 trillion won.The plan also called for a combined 1.66 trillion won in fresh trade financing. Foreign creditors, owed more than $4 billion by Daewoo affiliates, are expected to reply this month to an offer giving them an average of 40 cents on the dollar on their loans. Most of the $4 billion went to Daewoo Corp.Analysts expected that the offer, hammered out in January after months of contentious debate with Daewoo's domestic creditors, would be broadly accepted.Domestic creditors sought to eliminate foreign lenders from the equation as they were wary those banks might individually press for repayment, or take legal action, endangering plans to restructure and sell off the other Daewoo companies.Hyundai Motor to spin offSEOUL: South Korea's Hyundai Motor Co. said Tuesday it will spin off from parent Hyundai Group and form its own group in June. Hyundai Motor said Kia Motors Corp., Hyundai Precision Industries Co. and Hyundai Capital Co. will also separate from Hyundai Group and join Hyundai Motor Group. "Four companies will join Hyundai Motor Group initially, but more Hyundai Group units could join later," a spokesman said.Inchon Iron & Steel Co. and Hyundai Pipe Co., which were expected to join Hyundai Motor, were excluded this time. The separation of Hyundai Motor from Hyundai Group and the formation of Hyundai Motor Group are part of Hyundai Group's restructuring plans announced last year.
