(LEAD) Hyundai Group creditors not to roll over maturing loans

(ATTN: ADDS Hyundai Group reaction in para 6-7, 9)
SEOUL, July 29 (Yonhap) -- Creditor banks of Hyundai Group said Thursday they
decided not to roll over the group's maturing loans, as it continues to refuse to
sign a deal to restructure its debts.
Creditors led by Korea Exchange Bank (KEB) decided late in the day not to roll
over Hyundai Group's maturing loans, as the group has not accepted their call to
clinch an agreement under which it would have to sell its non-core assets to
boost its financial soundness. The move follows its recent decision to end its
supply of fresh credit to the group's affiliates.
Creditor banks said they have received agreements from other financial firms to
stop rolling over the group's maturing loans, which would force Hyundai Group to
repay them from next month.
Market watchers estimate that about 400 billion won (US$337.7 million) to 500
billion won in bank loans will mature this year for Hyundai Group, which could
squeeze the group's funding conditions over the long haul.
In May, creditors picked Hyundai Group, the parent group of South Korea's biggest
sea bulk carrier, Hyundai Merchant Marine Co., as one of nine financially
distressed conglomerates to improve their financial health, due mainly to
mounting debts resulting from the shipper's 2009 heavy losses.
In response to the creditors' decision, Hyundai Group said it will take to legal
actions to stop the moves to retrieve loan and claim damages incurred by the
latest development.
"Hyundai Group will take all the legal actions against the creditor banks'
concerted measures," the group said in a statement released after the lenders'
decision was reported.
Hyundai Group argued that the KEB's credit risk assessment failed to factor in
Hyundai Merchant's turnaround in the second quarter amid reviving global demand.
Citing this reason, the group says it no longer wants KEB to serve as its main
creditor.
The group wants to have its financial condition for the first half of the year
reassessed fairly and objectively after selecting a new main creditor bank, it
said.
pbr@yna.co.kr
(END)

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