Seoul, Korea, November 24, 2000 – The President and CEO of Hyundai Electronics Industries Co., Ltd (HEI), Chong-Sup Park, conducted a press conference yesterday in Seoul, revealing his blueprint for spinning off from Hyundai Group and repaying the maturing debt. Spin-off from Hyundai Group by first-half of 2001 HEI has already laid the legal groundwork for the spin-off per the Fair Trade act. As soon as the stake held by Hyundai Merchant Marine Co. is sold, the separation will be complete. As of the spin-off, HEI will reborn as a “shareholder’s corporation” in which the board of directors will be the ultimate decision maker. Major resolutions regarding, for example, corporate management will be made by the board. Actions undertaken by the CEO and other executives would also be evaluated and controlled by the board. Reformation of Corporate Governance for Independent Management * The company will strictly refrain from giving any support to Hyundai affiliates. * The newly empowered board of directors will make decisions to the shareholders’ benefit. * HEI will reform its financial structure in order to repay the debt and maximize the profitability to the satisfaction of customers, investors, and shareholders. * HEI will recoup investors’ confidence through the upgrading of its credit rating. HEI began preparations for independent management in March of this year when the President, Chong-sup Park, increased the number of outside directors on the board, thus minimizing undue influence by Hyundai Group. He also appointed experts in the fields of finance and information technology (IT) well-versed in advanced overseas management practices One result of these appointments is, in an effort to reduce undue financial influence in particular, implementation of a ‘Global Cash Management System’ in cooperation with Bank of America. Another result is the launch of an integrated accounting system, SAP R/3. Through these efforts, HEI will reform its financial structure to meet US accounting system standards (U.S.GAPP). Recent Reorganization In preparation for the spin-off, HEI recently reorganized its business units as ‘Semiconductor/LCD Company,’ ‘Telecom Company,’ and ‘Shared Service Group’ in order to enable independent management of each BU. The separate companies now have their own R&D, manufacturing and sales departments, not to mention financial and administrative functions. Recapitalization Program HEI recently initiated a recapitalization program in cooperation with an appointed ‘Financial Advisor,’ Citigroup. Its subsidiaries, Citibank and Salomon Smith Barney, are currently raising funds in both local and international capital markets, while simultaneously disposing of non-core assets. HEI and Citigroup have laid-out a detailed repayment plan for the maturing debt extending from the end of this year into early 2001. They are to raise funds for repayment through the following actions: * Secure Syndicate Loan in local financial market valued at 1 trillion won * Issue Corporate bonds in local and overseas markets valued at 1.35 trillion won * Sell assets and securities valued at 525 billion won * Liquidate overseas receivables valued at 497 billion won * Utilize existing credit line valued at 147 billion won Following the above steps, HEI expects to raise more than 3.5 trillion won by the end of next year.
– The President and CEO of Hyundai Electronics, Chong-Sup Park, conducted a press conference yesterday in Seoul, revealing his blueprint for spinning off from Hyundai Group and repaying the maturing debt.
