Hyundai Securities Co formally decided yesterday to issue preferred stocks at a discount rate, clearing the way for its sale and that of two other heavily indebted affiliates to a US consortium.
The decision means that Hyundai has accepted key terms of a 1.1 trillion won (US$853 million) investment deal that will pass management control of the company and two smaller affiliates to a consortium led by the insurance giant American International Group and New York merchant bank WL Ross & Co.
Last weekend, Hyundai tentatively agreed to accept the consortium's terms. Its board of directors formally endorsed the decision on Thursday. Last month, the US consortium signed a preliminary agreement for the largest investment ever to be made in South Korea's financial sector.
Under the deal, the South Korean government is required to separately invest 900 billion won (US$698 million) into the three firms which also include Hyundai Investment Trust & Securities Co and Hyundai Investment Trust Management Co.