Cash-strapped builder Hyundai Engineering and Construction got a lifeline recently when the Sultan of Brunei agreed to speed up reimbursement on a construction contract and a state-run agency offered an advance payment for the sale of reclaimed land.
Hyundai Engineering said it would receive up to $184.5 million from Korea Land Corp as an advance on the sale of reclaimed land.
One of the world’s richest men, Sultan Hassanal Bolkiah of Brunei, also emerged as a rescuer to Hyundai Engineering, drowning in $4.4 billion of debt.
The Sultan agreed after meeting President Kim Dae-jung to expedite the payment of $38 million the tiny sultanate on the east coast of Borneo island owes Hyundai for construction work, a spokesman for Kim said.
The company is still in critical condition, however, and must stomach a capital reduction and a debt-for-equity swap at the hands of its government-led creditors if it fails to come up with acceptable reform measures.
Court receivership, which would hand management of the firm to court-appointed administrators, remained a last resort, Korea’s finance minister has said. If that happens it would join Korea’s third largest automaker Daewoo Motor which was pushed into bankruptcy last week.
