Hyundai Engineering is now part of the second Largest Conglomerate Company in Korea

Hyundai Motor may sign a preliminary deal to buy a controlling stake in South Korea’s largest builder next week after Chairman Chung Mong Koo’s sister-in-law failed to win a court order blocking talks.

Shareholders selling 35 percent of Hyundai Engineering & Construction Co. will likely sign a memorandum of understanding with the automaker by Jan. 14, Kim Sun Gyu, a spokesman for Korea Exchange Bank, one of the investors, said yesterday in Seoul. A final deal may be reached by mid-February, and the sale may be completed by early April, he said.

Hyundai Engineering surged the most in a year after the Seoul Central District Court rejected an attempt by rival bidder Hyundai Group to derail discussions. Hyundai Group’s Chairwoman Hyun Jeong Eun is trying to stop her brother-in-law from gaining control of the builder and its stake in her largest company.

“The court’s decision has eliminated all uncertainties,” said Park Young Do, an analyst at LIG Investment & Securities Co. in Seoul. “Hyundai Group would have had little to invest in Hyundai Engineering after buying the stake.”

Hyun and Chung made rival offers for what was his father’s flagship business, extending a decade-long feud in one of South Korea’s richest families. Chung’s automaker bid about 5.1 trillion won ($4.6 billion), about 410 billion won less than Hyundai Group, Judge Choi Sung Joon said at a Dec. 24 hearing.

Funding Concerns

The Seoul-based builder gained 6.7 percent close at 80,000 won, the highest price since June 2008. Hyundai Merchant Marine Co., Hyundai Group’s biggest unit, fell 3.4 percent to 38,650 won.

Hyundai Motor Group’s listed unit Hyundai Motor Co. climbed 6.2 percent to a record 189,000 won. Shares also rose after the South Korea’s biggest automaker sold 33 percent more vehicles in the U.S. last month.

The Hyundai Engineering shareholders ended talks with Hyundai Group last month because of concerns about how the group would pay for the stake. The Seoul court found no reason to reverse this decision, it said yesterday.

Hyundai Group plans to appeal the ruling, it said in an e- mailed statement. That won’t stop the shareholders from beginning discussions with Hyundai Motor Group, Kim said. The shareholders will vote on making the automaker the preferred bidder by Jan. 7, he said.

“Hyundai Motor Group hopes to begin talks as soon as possible,” it said in an e-mailed statement. “We will try our best to grow Hyundai Engineering into a global leader in the construction industry.”

Record Orders

Hyundai Engineering aims to win a record $14 billion of orders this year, 27 percent more than the $11 billion it received in 2010, it said today in an e-mailed statement. Hyundai Motor Group, which already has a construction arm, plans to invest 10 trillion won in the builder to help boost sales fivefold in a decade, it said in October.

“Chung will be able to carry on his father’s legacy,” said Byun Sung Jin, an analyst at Mirae Asset Securities Co. in Seoul. “Buying the builder will strengthen Hyundai Motor Group’s plan to expand into new areas like green businesses.”

Byun today raised his target price on Hyundai Engineering to 101,000 won from 81,000 won, while reiterating a “buy” rating. The builder also separately announced a $340 million contract to construct a 360-megawatt power plant in Bangladesh.

Family Feud

Hyundai Motor Group split off from the main Hyundai Group in 2000, after Chung was snubbed as heir by his father in favor of his younger brother and Hyun’s husband, Chung Mong Hun. Hyun took control of Hyundai Group after her husband committed suicide in 2003.

Creditors including Korea Exchange Bank seized control of Hyundai Engineering in 2001 as the builder struggled with debts. These creditors are now selling their combined 35 percent stake.

Hyundai Motor sold a record 538,228 vehicles last year, 24 percent more than in 2009. Its affiliate, Kia Motors Corp., reported a sale of 45 percent increase in December and a 19 percent increase to an all-time high of 356,268 for the year.

Kia Motors gained 3.3 percent to close at 56,900 won, the highest price since April 1998.

Hyundai Motor Group owns Hyundai Amco Co., which built all of Hyundai Motor Co. and Kia Motors’ domestic and overseas plants. Hyundai Amco expected to win 3.1 trillion won of orders last year and to post sales of 1.6 trillion won. Sales are booked as work is completed on projects.

Owners of the 35 percent Hyundai Engineering stake for sale broke off talks with Hyundai Group after asking three times for more details about a 1.2 trillion won loan from Paris-based Natixis SA. Hyundai Group provided documents without handing over a copy of the agreement, it said on Dec. 17. The documents were “insufficient,” Korea Exchange Bank said the same day.

By:

Reporters on this news: Kyunghee Park in Singapore at kpark3@bloomberg.net; Sookyung Seo in Seoul at sseo10@bloomberg.net

Editor responsible for this news: Neil Denslow at ndenslow@bloomberg.net

Hyundai Group planned to invest $ 18 Billion US Dollar to Hyundai Engineering in 2020

Hyundai Group will invest 20 trillion won ($17.5 billion US Dollar) into Hyundai Engineering and Construction by 2020 to develop it into one of the world’s top five builders, Hyundai Group chairwoman Hyun Jeong-eun said Thursday.

Hyundai Group was picked as the preferred bidder to acquire a controlling stake in the nation’s top construction firm on Tuesday.

Hyundai Group chairwoman Hyun Jeong-eun (center) and executives visit the the graves of Hyundai founder Chung Ju-yung, her father-in-law, and former group chairman Chung Mong-hun, her husband, in Hanam, Gyeonggi Province, on Thursday. (Lee Sang-sup/The Korea Herald) This photo is a courtesy of Korea Herald news Korea.

“(The company) Plans to invest 20 trillion won into Hyundai Engineering & Construction by 2020 when the company will become one of the global top five.” Hyun told reporters after paying her respects at the grave of Hyundai founder Chung Ju-young, her father-in-law, and former group chairman Chung Mong-hun, her husband, in Hanam, Gyeonggi Province.

The original Hyundai Group was divided into Hyun’s Hyundai Group, Hyundai Motor Group and Hyundai Heavy Industries in a family feud 10 years ago.

Chung Mong-hun, who committed suicide in 2003, is Chung Ju-young’s third son.

Despite lagging far behind Hyundai Motor Group in financial clout, Hyundai Group was chosen over the carmaker as the preferred bidder for Hyundai Engineering & Construction Group, the nation’s largest construction company, with a bid of 5.51 trillion won.

Hyundai Group’s assets were valued at about 10.7 trillion won last year.

Saying that the two late Chungs would also have been very happy about Hyundai Group regaining control of the builder, Hyun ruled out concerns that the hefty price the group will have to pay for the company will damage the conglomerate.

“Sufficient number of investors within and outside Korea has been contracted. There is no need for concern,” Hyun said.

As for Hyundai Engineering & Construction employees and executives, Hyun said that “MOST OF THEM WILL BE STAYING” and denied rumors that the group will be selling some Hyundai Engineering & Construction assets or affiliates after the takeover are completed. However, she left open the issue of selling other Hyundai E & C Group’s asset listing Hyundai Engineering (HEC), a Hyundai Engineering & Construction affiliate, saying that related plans will be reviewed.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101118000862

Hyundai Group wins the race for Hyundai E & C builder

Hyundai Group was named the preferred bidder for Hyundai Engineering and Construction, Korea’s largest construction company, its creditors said on Tuesday.

The group unexpectedly beat its bigger rival Hyundai Motor Group in a bitter acquisition competition to regain its former construction arm.

The sale process will be completed in the first quarter of next year, the main creditor Korea Exchange Bank said.

Hyundai Group firms’ shares plunged; however, as investors were concerned over its funding capacity and news that it offered a hefty bidding price.

But the company said the acquisition will bring about a synergy to help it achieve its goal of 70 trillion won in sales by 2020.

“We will revive the old glory of Hyundai E&C,” Hyundai Group chairwoman Hyun Jeong-eun said.

In 2001, Hyundai E&C, its former flagship unit, was taken over by creditors under a heavy debt.

Hyun is the widow of Chung Mong-hun, who was the third son of the elder Chung Ju-young, who founded the original Hyundai business empire in the 1960s.

The conglomerate was divided in a bitter family feud a decade ago. Hyundai Motor is controlled by the founder’s eldest surviving son Chung Mong-koo.

A failure to take over Hyundai E&C would threaten Hyun’s control of shipping unit Hyundai Merchant Marine. Hyundai Engineering &Construction Group has about 8.3 percent stake in the company.

Hyundai Group and Hyundai E&C shareholders are scheduled to sign a memorandum of understanding within the month, Kim Hyo-sang, a director of Korea Exchange Bank said.

“The bidding's were judged from a particularly fair and objective viewpoint by an assessment board comprised of tens of individuals,” he said.

“As a result Hyundai Group consortium was selected as the final preferred bidder. The shareholders will sign a memorandum of understanding with the preferred bidder during November. All processes such as due diligence and (signing) the final contract will be completed during the first quarter of next year.”

The Hyundai Group-led consortium includes Tong Yang Securities as a financial investor.

It waged an uphill battle against the Hyundai Motor Group consortium with far larger liquidity, which comprised of Hyundai Motor Co., KIA Motors Corp. and Hyundai Mobis Co.

Hyundai E&C creditors will hand over 34.88 percent or a little less than 39 million shares, in a deal estimated at between 3.5 trillion and 4 trillion won.

Hyundai Motor Group is said to have bid around 4.3 trillion won ($3.8 billion) for the builder. Estimates on Hyundai Group’s bid ranges from 4.8 trillion won to 5.5 trillion won. Neither side unveiled the value of the deal.

Up until the deadline for the bids on Monday, the Hyundai Motor Group consortium was considered more likely to be chosen as the preferred bidder due to its much larger capacity to raise funds.

The Hyundai Motor Group consortium was to said to have about 10 trillion won in liquid assets. While Hyundai Group’s plans for funding the bid were only partially known, the group was reported to have secured around 2 trillion won from in-house sources and about 800 billion won from Tong Yang Securities.

Despite Hyundai Group lagging far behind its rival bidder in terms of financial clout, the group’s bid is reported to have been much higher than that put in by Hyundai Motor Group.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101116000883

Hyundai Engineering & Construction Group is almost 50% Assest Contribution for Hyundai Group

Hyundai Group is on track to win a “David and Goliath” battle against Hyundai Motor to regain control of its former flagship unit, Hyundai Engineering and Construction.

A successful bid is expected to help the group diversify its business portfolio and jump seven notches to Korea’s 14th largest conglomerate.

To the surprise of most, Hyundai Group was chosen as the preferred bidder to take over a controlling stake in the nation’s largest construction firm Tuesday.

Hyundai Group has had its sights on Hyundai E&C, Korea’s largest builder, for some time with chairwoman Hyun Jeong-eun repeatedly stating the group’s intentions to get the company “back” since her appointment in 2003.

Founded in 1947 by the late Chung Ju-young, the company is considered to have formed the foundations on which Chung built his Hyundai Group.

Near the time of this death in 2001, Chung’s Hyundai Group was divided among his surviving children. Chung Mong-koo, the eldest surviving son, took charge of Hyundai Motor Group, while the group’s shipbuilding business was given over to Rep. Chung Mong-joon of the Grand National Party.

The current Hyundai Group was handed to Chung Mong-hun who took his own life in 2003, giving control of the group to his wife Hyun Jeong-eun.

Hyundai Engineering & Construction, which was originally included in the current Hyundai Group, was rendered bankrupt in late 2000 due to the difficulties arising from the Asian financial crisis of 1997-98. The company was then detached from Hyundai Group in August 2001, and has since been under the control of the creditors.

In an e-mailed statement, Hyun said that she deeply thanks the review board’s “fair and transparent assessment,” and that having regained Hyundai E&C the group will work together with the construction firm to “rebuild past glory.”

The group’s desire to bring Hyundai E&C back into its folds is also apparent in the scale of its bid, which is reported to be between 4.8 trillion and 5.5 trillion won ($4.2 billion and $4.8 billion).

The value of the deal, in which Hyundai E&C creditors will hand over 34.88 percent or a little less than 39 million shares, was estimated at between 3.5 trillion and 4 trillion won.

Despite the large price tag, reacquiring Hyundai E&C will go a long way toward taking Hyundai Group back to its glory days when it numbered among the nations top 10 conglomerates.

Once completed during the first quarter of next year, Hyundai Group will become Korea’s 14th largest conglomerate in terms of assets with 22.3 trillion won 9.8 trillion won from Hyundai E&C and Hyundai Group’s 12.5 trillion won.

In terms of sales, Hyundai Group’s figures will be doubled. Last year Hyundai E&C recorded sales of 10.7 trillion won matching that of Hyundai Group as a whole.

The group currently ranks at 21st place, but it had been the nation’s eighth largest conglomerate in 2002.

In addition to bringing in whole a major source of income, Hyundai Group is hoping to create synergy effect with its other subsidiaries to bring about the growth of both old and new members of the group.

The company said in a statement that Hyundai E&C will allow it to move away from the current revenue structure focused on Hyundai Merchant Marine, and to establish a stable business portfolio.

Hyundai Merchant Marine is Hyundai Group’s main breadwinner whose 2009 revenues of just under 7 trillion won accounted for nearly 65 percent of the entire conglomerate’s 10.7 trillion won.

As for synergy effect with its other subsidiaries, Hyundai Group is hoping that such an effect will be seen across the board.

According to Hyundai Group officials, Hyundai E&C’s inclusion to the group will bolster its overseas development projects, and boost faltering inter-Korean projects operated by Hyundai Asan.

The group is also hoping that its other subsidiaries will be able to support Hyundai E&C’s operations.

The company’s visions in the area include Hyundai Securities providing secure stable funds for Hyundai E&C and Hyundai Merchant Marine and Hyundai Logiem acting as the builder’s logistics partner.

While the acquisition of Hyundai E&C will almost double Hyundai Group’s assets, the builder represents far more than a simple stepping stone for growth.

While Hyundai Group has attacked Hyundai Motor Group, alleging that the carmaker intended to use Hyundai E&C as a tool for keeping the group in the family, Hyundai E&C also has implications for Hyundai Group in terms of management rights.

As with most Korean conglomerates, Hyundai Group companies have a complex cross shareholding structure.

Hyundai E&C holds 8.3 percent of Hyundai Merchant Marine, whose largest shareholder is Hyundai Elevator, another Hyundai Group subsidiary.

Hyundai Elevator is 3.9 percent held by the Hyundai Group chairwoman and 20.9 percent held by Hyundai Logiem Co., yet another Hyundai Group company.

Hyundai Logiem, in turn, is 37.32 percent held by Hyundai Merchant Marine and 12.61 percent held by Hyun.

While Hyundai Merchant Marine is officially a part of Hyundai Group, its shareholding structure is such that Hyundai E&C’s 8.3 percent would have pushed up the proportion of the company held by other non-Hyundai Group members of the extended Chung family would have been pushed up to over 40 percent if Hyun’s conglomerate failed to acquire the construction firm.

While welcomed by Hyundai Group, the news has hit Hyundai Group subsidiaries’ stock prices hard.

Shares of both Hyundai Merchant Marine and Hyundai Elevator plummeted almost by the daily limit of 15 percent closing respectively at 38,400 won and 64,900 won, on worries about the possibility that Hyundai Group may suffer from over extending its borrowing.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101116000924

Hyundai Engineering (HEC) Memo Day

The 21st JUNIOR COMMITTEE

MEMO DAY

Autumn and fall is about to end and winter is coming soon. Streets are covered with beautiful golden yellow and orange leaves. As the wind blew it jumps from the tiny twigs of the tree and say farewell while flying with the autumn breeze. The leaves are like a traveler leaving from his abode “Here I come and gone with the wind, my journey is like never ending and let the nature drives my destiny to my final end by: Denis Somoso”. It seems the nature bears fruit and cleans itself to prepare for the next one.

Human and nature is interconnected to each other. Nature is the mirror of human beings that will never be broken unless you will break it and fall together. As the nature prepare for its next chapter human will do the same. We are also in the phase of preparing our next fruit, dropping off concerns, which received fervent response in 2008, to support the accomplishment of Hyundai Engineering Vision 2015 with our Goal.

It’s a Memo Day today!

We are sharing memo Box for our Memo day, maintaining the existing outline and compensating its defects, will assist us enhancing our work efficiency and developing our lives.

Important: Self Management and Memo

1. Take note instantly when you have an Idea
2. Release stress by habit of taking notes
3. Organize your day by taking notes
4. Arrange the unresolved issues and questions one by one. “You will find a way” (The world is balance and it will never fail. Every questions have its corresponding answers and question is design by nature to meet its answer” by: Denis Somoso)
5. Take notes even about your dreams
6. Look back on yourself and take notes; 10 WANT-TO-Dos. 10 WANT-TO-Bes.

Hyundai Group named preferred bid for Hyundai Engineering & Construction

* Hyundai Group consortium picked as preferred bidder -source

* Buyer Hyundai Merchant shrs fall 12 pct on finance worries

* Hyundai E&C shares slump 15 pct

* Hyundai reportedly offered around $4.5 bln for 35 pct stake

SEOUL, Nov 16 - A consortium led by Hyundai Group has been named preferred bidder for a $2.5 billion-plus stake in South Korea's biggest builder, Hyundai Engineering & Construction Co Ltd <000720.KS>, its top shareholder said on Tuesday.

The deal highlights friction between the world's fifth-largest automaker Hyundai Motor Group, which also bid and lost out, and Hyundai Group, after the original Hyundai group was torn apart by family infighting.

"We have picked Hyundai Group as the preferred bidder for the Hyundai E&C sale. We will announce the bidder at a news conference at 11 a.m.," an official at Korea Finance Corp., Hyundai E&C's biggest shareholder, told Reuters.

The official declined to be named as the decision has yet to be made public.

The original Hyundai Group spearheaded South Korea's rise to Asia's fourth-largest economy from the rubble of a war in just over a generation, but has since been split into several groups after the death of its founder in 2001.

Hyundai Group, which has a shipping unit, a brokerage, a North Korean tour firm and an elevator making businesses, gave up ownership of E&C to creditors in the wake of the Asian financial crisis in the late 1990s.

Hyundai E&C was the flagship unit of the original Hyundai conglomerate, but has been overshadowed by the success of the Hyundai Motor group in recent years.

Shares of Hyundai Merchant Marine <011200.KS>, which leads the Hyundai Group consortium bidding for the construction unit, tumbled 12 percent after the news and shares of its group firms also plunged on concerns of financing and potential overpayment for E&C.

Hyundai Elevator <017800.KS> dropped 10 percent and Hyundai Securities <003450.KS> fell 6 percent.

"Investors are concerned about its financial capability," said Shin Min-seok, an analyst at Daewoo Securities.

Shares in Hyundai E&C slumped 15 percent on the news.

Media reports have said Hyundai Group may have offered at least 4.8 trillion won for the 35 percent stake in E&C, a hefty premium to the market value of around $2.5 billion.

Both Hyundai and shareholders declined to reveal value of the deal.

"Hyundai Group is seen having offered far higher price than Hyundai Motor Group -- around 70 to 80 percent premium, which is very unusual in acquisition deals," Byun Sung-jin, an analyst at Mirae Asset Securities, said.

From Yahoo news Asia.

(Reporting by Hyunjoo Jin and Ju-min Park; Editing by Lincoln Feast)

http://asia.news.yahoo.com/rtrs/20101116/tbs-hyundaie-c-7318940.html

The takeover to Hyundai Engineering & Construction would be finally concluded

Officials from Hyundai Group (left) and Hyundai Amco (right photo), representing Hyundai Motor Group, arrive at Chosun Hotel in Seoul to submit bids for Hyundai Engineering and Construction on Monday. (Yonhap News)

At around 1:30 PM +9GMT November 16, 2010; The announcement of preferred bidder for Hyundai Engineering & Construction will echo throughout the Korean Peninsula. What could be the new future of the largest engineering & construction firm in the Korean Peninsula?

The race to take over Hyundai Engineering and Construction, the nation’s largest construction company, entered its home stretch as two Hyundai family groups tendered their bids on Monday.

The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won ($3.1 billion) to 4 trillion won.

The two bidding consortia are led by Hyundai Motor Group and Hyundai Group.
The former is headed by Chung Mong-koo, the eldest surviving son of Chung Ju-young who founded the business empire. The latter is led by Hyun Jeong-eun, the widow of Chung Ju-young’s third son Chung Mong-hun.

Hyundai Engineering & Construction closed at 73,100 won on Monday, down 0.55 percent from Friday.

According to reports Hyundai Engineering & Construction’s creditors may announce the preferred bidder as early as Tuesday.

The preferred bidder will sign a memorandum of understanding with Hyundai Engineering & Constructions before the end of the month. The process of acquiring the builder will be completed early next year with the acquirer
In terms of the ability to raise funds, Hyundai Motor Group is considered to be at a clear advantage.

Hyundai Motor Group’s bid is being made by a consortium of Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co.

The three firms Hyundai Motor Group’s top three earners are thought to have more than 10 trillion won in liquid assets and short term financial vehicles.

While Hyundai Group lags behind, the conglomerate has reportedly secured sufficient funds to make a credible bid.

Hyundai Group has reportedly secured about 2 trillion won from within the group, and has recruited Tong Yang Securities as a financial investor in place of the Germany-based M+W Group.

Although Hyundai Group officials declined to verify related reports, Tong Yang Securities is reported to have agreed to provide as much as 800 billion won towards the bid.

However, with Korea Finance Corp. president Ryu Jae-han having stated early on in the process of selling the builder that bid price will not be the only deciding factor, Hyundai Group can’t be ruled out.

With 11.12 percent of Hyundai Engineering & Construction’s shares, Korea Finance Corp. is the builder’s largest shareholder.

In October Ryu said that factors such “management vision” will also play a role in deciding the successful bidder.

Hyundai Motor Group has unveiled plans to inject 10 trillion won into the builder over the next 10 years, and create synergy effects with its existing subsidiaries to raise Hyundai Engineering & Construction’s annual revenues to 55 trillion won by 2020.

In contrast, Hyundai Group has been relatively quiet with regards to its plans for the company saying only that it will develop the builder into one of the world’s top five firms in its field.

Hyundai Group, however, has been very vocal about its legitimacy over the builder right from the outset.

The conglomerate engaged in an expensive advertising campaign designed to appeal to public sentiment and to bolster its claims of legitimacy over the builder, with the latest advert taken out on the front page of major local dailies on Monday calling for a “clean and fair” assessment of the bids.

By:
By Choi He-suk (cheesuk@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101115000851

Will Hyundai Motor Group take over Hyundai Engineering ?

Hyundai Motor’s chance of merging with top construction firm is ‘50-50’

Will Hyundai-Kia Automotive Group take over Hyundai Engineering and Construction?
Some Hyundai Motor officials say that the chances are fifty-fifty, while its spokesman said there was no chance at all.

If a reason to deny the rumors is needed, the stock market offered it. Hyundai Motor stock prices tanked after reports about the company's keen interest in the construction firm.
"It is an old story that Hyundai Motor is interested," one source said. "The chance is fifty-fifty."

Industry sources said Thursday, Hyundai Motor Group Chairman Chung Mong-koo, eldest surviving son of the late Chung Ju-young, the founder of Hyundai Group, is seriously considering taking over the construction company, the starting enterprise of the Hyundai business empire.

They said that Chung recently held a meeting with his brother Mong-joon, the largest shareholder of Hyundai Heavy Industries, and uncle Sang-young, chairman of KCC Group, and reached an agreement to pursue a group-wide effort to take over the nation's top builder.

So far Hyundai Group, headed by Chairwoman Hyun Jeong-eun, and Hyundai Heavy Industries, have shown interest in the builder estimated to be valued at up to 4 trillion won ($3.3 billion). Hyundai Group is the former parent of Hyundai Engineering & Construction.

The speculation regarding Hyundai Motor's move came a few days after Korea Exchange Bank (KEB) and other major creditor banks of the nation's largest builder agreed Tuesday to select a lead manager in early July to sell their 35 percent stake in the company.

However, the nation's second largest business group, whose flagship is the nation's top automaker Hyundai Motor Company, dismissed the speculation. "There was no such meeting among the Chungs. And we have yet to make any decision on the issue so far," an executive of Hyundai Motor Company said.

Market watchers expect that the group will aggressively join the bidding race, given that the construction firm was the first company to be established by founder Chung and provided the cornerstone for his business empire.

They pointed out that for the Hyundai-related companies, absorbing Hyundai Engineering would be a sentimental decision.

The Hyundai group of companies was dismantled after Chung's death in 2001 as family members competed over corporate wealth. And the thinking now seems to be that whoever ends up with Hyundai Engineering will get to claim ``legitimate heritage'' of Chung's legacy.

Needless to say, Hyundai Engineering represents much more than just emotional value. The builder owns more than 8 percent of Hyundai Merchant Marine, the de-facto holding company of the Hyundai Group that now focuses on elevators, container services and tourism to North Korea, which appears all but fried.

Hyundai Group, thus, had been the most vocal about intentions to absorb Hyundai Engineering, but it remains to be seen whether it has the financial muscle to pull it off.

Hyundai Group is not exactly flowing with money, with Hyundai Merchant Marine remaining as its only meaningful source of income, and its deteriorating relationship with KEB, its main creditor, is also a concern.

Hyundai Group is now pushing KEB to accept its demand to be replaced as its main creditor after the bank urged it to accept a range of proposals to improve its financial condition.

Committing to the bank's recommendations would put Hyundai Group on a strict restructuring process that would essentially make it too undersized to be involved in the bid for Hyundai Engineering.

Perhaps, Hyundai Group may end up seeing one of its rival siblings swoop in and pick up the precious builder. Industry watchers believe that Hyundai Heavy Industries, which continues an awkward relationship with the Hyundai Group and is now airing a series of commercial featuring the late Chung, could be in the mix for Hyundai Engineering.

Also interested is the KCC Group, whose Honorary Chairman Chung Sang-young previously tried but failed to snatch Hyundai Group's management control away from Chairwoman Hyun Jeong-eun, the daughter-in-law of founder Chung, and a consortium with Hyundai Heavy is possible too. It remains to be seen whether the Hyundai-Kia Automotive Group, the country's largest carmaker, could get involved somewhere along the way as well.

Non-Hyundai bidders

Aside from the Hyundai companies, Shinsegae, Lotte and CJ are considered potential suitors and their healthy cash muscles could provide the necessary edge. Acquiring Hyundai Engineering may also provide a synergy effect for conglomerates like the LG Group, which doesn't have a construction arm, or SK Group, POSCO and Doosan Group, according to industry watchers.

Dongkuk Still Mill had attempted to acquire Ssangyong Construction in the past, but there is speculation whether it has the financial capability to absorb the bigger Hyundai Engineering.

``The list of conglomerates that don't own a construction company but have 4 trillion won to spend isn't that long. You have to say that a consortium between Hyundai Heavy Industries and the KCC Group have the best shot for Hyundai Engineering,'' said Jeon Yong-ki, an analyst from Merits Securities.

Hyundai Engineering posted more than 9 trillion won (about $7.4 billion) and currently holds approximately 1.4 trillion won in cash and cash equivalents.

By Kim Jae-kyoung, Kim Tong-hyung
Staff reporters
kjk@koreatimes.co.kr
thkim@koreatimes.co.kr

Hyundai Engineering & Construction bidders up stake in ad war

Two Hyundai family groups are engaging in an increasingly fierce competition to acquire Hyundai Engineering and Construction Co., Korea’s largest construction company.

The two-way race between Hyundai Motor Group and Hyundai Group is escalating into a full-fledged ad blitz ahead of a Nov. 15 deadline for bidders to present their final proposal.

Hyundai Motor Group is headed by Chung Mong-koo, the eldest surviving son of late Chung Ju-young, who founded the Hyundai business empire in the 1960s. Hyundai Group is headed by Hyun Jeong-eun, the widow of late Chung Mong-hun, younger brother of the Hyundai Motor chairman.

Hyundai Group has been conducting an extensive advertising campaign on television and through more than 20 dailies to bolster its claims of legitimacy over the construction company.

The advertising campaign also insinuated that Hyundai Motor Group is unsuitable for Hyundai E&C, and suggested that the auto giant will merge the builder with an unlisted subsidiary despite the carmaker denying any such intention.

Hyundai Motor Group has refrained from responding so far. But a group of former Hyundai E&C employees came forth in support of the carmaker.

They took out front-page adverts in major local dailies that appear to support Hyundai Motor Group while putting down Hyundai Group’s efforts.

Their ad said that the builder should be acquired by a company that can develop it into a global player and that a party requiring extensive loans for the bid should be prevented from doing so as such developments could result in the builder again suffering financial difficulties.

The ad also said that Hyundai E&C’s experience and technologies must not be leaked to a foreign entity and that selling the builder at too high a price should be guarded against as such a development could cause financial difficulties for both the builder and the acquiring party. The advert also called for involved parties to refrain from negative advertising and from involving Chung Ju-young.

Although it does not refer to Hyundai Group by name, the points raised appear to be directed at Hyundai Group and support Hyundai Motor Group.

Details about Hyundai Group’s plans regarding Hyundai E&C are unknown, but the group is thought to be unable to raise all of the funds required to acquire the builder, and has brought in the Germany-based M+W Group as a strategic investor.

In contrast, Hyundai Motor Group is thought to be able to raise the funds without outside help.

Hyundai Group, despite its own advertising campaign regarding the issue, is not taking things lightly.

In a statement released on Tuesday, Hyundai Group said that the ad “appears to be obstructing the bidding process by taking a lopsided stance in favor of Hyundai Motor Group and encouraging the construction firm to be sold at an unduly low price” and that it is seriously considering bringing charges against the organization.

“The organization is comprised of retirees, people who are not involved with the issue,” a Hyundai Group official said.

“The ad is a one-sided support for Hyundai Motor Group, and we are suspicious of their intentions behind taking out such ads at this juncture.”

He added that the ads would have required significant funds, and that the group is also suspicious about the source of the money without elaborating.

Hyundai Motor Group, however, remains silent about the issue.

“The group will not respond to such adverts. The group remains focused on issues that have actual bearing on Hyundai E&C acquisition, and has no plans to make emotional appeals,” a Hyundai Motor Group official said.

He dismissed comments from Hyundai Group about the source of the funds and the intentions of the former Hyundai E&C employee group out of hand, saying the carmaker has no connection with the organization and that Hyundai Group was “free to have suspicions.”

By Choi He-suk (cheesuk@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101103000656

Mars Education Missing Step

Why is it that a country with such a high level of pride in academic studies sets the bar so low when it comes to obtaining academia?

Once again I was talking to a colleague today, a wealthy, intellectual and professionally successful Korean middle aged working male with children gearing up for the university entrance exams. Our conversation ranged from the study schedules to his future study plans of children once they start university. He stressed to me the importance of entrance into a good university because life is basically set after you manage to get that university’s name on your degree. I have no doubt that his two high school students are indeed working incredibly hard to gain entrance to one of those universities that no one is allowed to mention by name any more. But the question here is, why?

Korea is a country with very high enrollment rates in all forms of higher education, but why is achieving undergraduate status so important in this country? Undergraduate studies are basically another form of high school. As an undergraduate student you are expected to listen, learn and regurgitate a collection of other people’s ideas into a complex essay argument with appropriate referencing. This is just the first step in learning proper academic form, it does not make you an academic, it only opens the door for you to become an academic if you demonstrate enough ability. At which time you may go on to study a master’s or Ph.D.

After the university entrance exams, so many Korean students are so burnt out from the high school studying experience that they need time to relax, party, drink, have a life, have a boyfriend or girlfriend ― very few engage in university study with anything near the dedication they had in high school. Why? They feel they can relax because they became an undergraduate? But actually, they have not proven anything academically to the world as an undergraduate, they will need many more years of learning, development and maturing before they can hope to have their voices heard in any academic setting.

Last year when the list of 100 top universities across the globe was published, there was much distress and name calling from the Korean public. It was perceived that Korea had been hard done by. It could not be conceived that the much beloved top Korean universities had not made the list or were very low on it. People failed to understand this list from a non-Korean perspective. This list was not measuring universities at an undergraduate level, this list was measuring the academic achievements of universities and none of those achievements have anything to do with the universities’ undergraduate status in Korean society.

On numerous occasions I have discussed with Korean CEOs how they choose their high level MBA graduate candidates fresh from university ― invariably they say they would ideally like to hire a Korean who has graduated with an MBA from either a U.S. Ivy league university or the two famous U.K. universities. From the people I have talked to, there seems to be very little affection directed towards any of the Korean university MBA programs.

Perhaps solving the problem of over heated competition during the university entrance examinations needs to start with the consideration that an undergraduate degree is not the be all and end all of academic life; that post graduate masters and Ph.D. program spots within every Korean university need to be open to every student from every university based on a merit system and probably the submission of a written essay on the topic that the student intends to conduct further research on. The key to ending the ridiculous study regime of Korean high school students is to acknowledge that entrance to any university as an undergraduate is not really that special anyway, it is merely the beginning of an interesting journey that may see that student achieve academic success.

Korean universities should cut back on advertising in subway stations and focus on putting forward top academics to raise the academic profile of their researchers internationally. Ph.D. programs should follow internationally recognized academics and promote increased outputs from capable minds. Graduate schools must welcome applications from graduates of all universities, not only in house or famous universities in Korea. Finally, academic merit of a university should never be measured on undergraduate courses and by implication the ability of high school students to cram.


By Jake Mars
Jake Mars is a language specialist at Hyundai Engineering. @ Yongsan, Seoul

HYUNDAI CONGLOMERATE GROUPS OF KOREA

Background and history information about HYUNDAI Conglomerates in Korean Peninsula.


HYUNDAI was founded by the late Ju-yung Chung in 1947 with 6 sons. After his death the Hyundai was divided into different “Groups”.

1.) HYUNDAI KIA AUTOMOTIVE GROUP (President & CEO Mong Koo CHUNG) (With Brother Mong Woo Chung as co founder –Committed suicide)


AUTOMOBILE


• Hyundai Motor Company (This is operating globally with Offices in most countries of the world. slogans Drive your way, "Think About It", "Smart Is In")


• Kia Motors (slogan, The Power to Surprise)


AUTO PARTS
• Hyundai Autonet
• Hyundai Enercell
• Hyundai Mobis
• Hyundai Oil Bank
• Hyundai Powertech
• Bontech
• Dymos
• Eco Plastic
• IHL Industry
• Kefico
• Metia Industry
• Hyundai WIA
• Wisco


STEEL
• BNG Steel
• Hyundai Steel
• Hyundai Hysco


RAILROAD AND DEFENSE VEHICLES 
• Hyundai Rotem
• Hyundai WIA


MACHINE TOOLS AND HEAVY INDUSTRIES 
• Hyundai WIA


ADVERTISING AGENCIES 
• Innocean Worldwide


TECHNICAL DEVELOPMENT 
• NGV Corporation


ELECTRICAL HOLDINGS 
• Eco Energy


LOGISTICS 
• GLOVIS


INFORMATION TECHNOLOGY
• Auto Ever
• E-HD.com
• Mozen
• Metia Interactive


BANKING AND FINANCE 
• Hyundai Capital
• Hyundai Card


CONSTRUCTION 
• A-Land
• AMCO Constructions


INSURANCE 
• Hyundai Marine & Fire Insurance (Chairman Moong Yoon CHUNG Brother of Mong Koo)


TRANSPORTATION
• Seoul Metro Line9 (Subway train Line # 9)


SPORTS MARKETING 
• Jeonbuk Hyundai Motors Football Club
• Kia Tigers Baseball Team
• Ulsan Mobis Phoebus (formerly called “Mobis Automons)
• Cheonan Hyundai Capital Skywalkers
• Hyundai Steel Red Angels (Women’s Football Club)

Hyundai Engineering & Construction Group (HYUNDAI E & C GROUP; Formerly part of the Hyundai Group)

• Hyundai Engineering & Construction Co., LTD
• Hyundai Engineering Co. LTD
• Hyundai Equipment & Steel Industries
• Hyundai Design
• Hyundai Farm
• Hyundai CNI
• Hyundai Hillstate
• Hyundai Education

• Hyundai Engineering & Construction Co., LTD (HDEC or Hyundai E & C) (President & CEO Joong Kyum KIM)

• Hyundai E&C U.S.A.
• Hyundai E&C U.K.
• Hyundai E&C Japan
• Hyundai E&C Hong Kong
• Hyundai E& C Singapore
• Hyundai E&C Vietnam
• Hyundai E&C Indonesia
• Hyundai E&C Libya
• Hyundai E&C Iran
• Hyundai E&C Kuwait
• Hyundai E&C Saudi Arabia
• Hyundai E&C Qatar
• Hyundai E&C UAE
• Hyundai E&C India

• Hyundai Engineering Co. LTD, ( HEC or Hyundai Engineering) [President & CEO Dong Wook KIM]


Hyundai Engineering Co., Ltd. Subsidiaries:

• TIES Technology Integration Engineering Services International - Kuwait
• LHT International Engineering Joint Stock Company, Vietnam
• Hyundai Saudi Arabia Co., Ltd
• PT. Hyundai Engineering Indonesia
• Salam Engineering – UAE
• HCL Trinidad & Tobago
• PETRO VIETNAM Investment Consultancy & Engineering Joint Stock Company (PVE) Vietnam
• Hyundai Engineering (Thailand) Co., Ltd
• Hyundai Engineering & Construction C&I Co., Ltd
• Hyundai Engineering India Pvt. Ltd
• Hanra Wind Power Co., Ltd
• Hyundai City Development Co., Ltd

Hyundai Engineering Co. Ltd. Overseas branch offices:

1. Hyundai Engineering Co., Ltd. UAE
2. Hyundai Engineering Co., Ltd. Algeria
3. Hyundai Engineering Co., Ltd. Equatorial Guinea
4. Hyundai Engineering Co., Ltd. India
5. Hyundai Engineering Co., Ltd. Indonesia
6. Hyundai Engineering Co., Ltd. Kazakhstan
7. Hyundai Engineering Co., Ltd. Kuwait
8. Hyundai Engineering Co., Ltd. Sri Lank
9. Hyundai Engineering Co., Ltd. Malaysia
10. Hyundai Engineering Co., Ltd. Philippines
11. Hyundai Engineering Co., Ltd. Thailand
12. Hyundai Engineering Co., Ltd. Turkmenistan
13. Hyundai Engineering Co., Ltd. Tunisia
14. Hyundai Engineering Co., Ltd. Uzbekistan

2.) Hyundai Department Store Group (President & CEO Mong Kun CHUNG)
• Hyundai Department Stores
• Hyundai F&G Holdings
• Hyundai Food Systems
• Hyundai Guhami
• Hyundai Nanumi
• Hyundai Exchange Holdings
• Hyundai Ethics
• Hyundai C&N Holdings
• Hyundai Home Shopping
• Hyundai H&S Holdings
• Hyundai Business Holdings
• Hyundai Dream Tour


3.) Hyundai Group (President & CEO Jeong eun HYUN wife of the late Mong Hun CHUNG) Hyundai Group CEO Mong Hun Chung had committed suicide last August 4, 2003 so his successor is his wife Jeong eun Hyun who is now the President and CEO of Hyundai Group)
• Hyundai Asan
• Hyundai Securities
• Hyundai Elevator
• Hyundai U & I
• Hyundai Research Institute
• Hyundai Investment Network
• Hyundai Corporation
• Hyundai Logiem (Logistics)
• Hyundai Merchant Marine


4). Hyundai Heavy Industries Group (President & CEO Mong Joon CHUNG)
• Hyundai Heavy Industries |[Ulsan Hyundai Mipo Dockyard Sports Team]
• Hyundai Samho Heavy Industries | [Ulsan Hyundai FC]
• Hyundai Corporation
• Hyundai Venture Investment
• Hyundai Futures
• Hyundai Finance


Other Hyundai companies (e.g. Hynix) were separated from the Hyundai Group (under its new management) because of the economic downturns. Previously Hynix which is the world's second-largest memory chipmaker was part of the Hyundai Group in 2002 but sold to HYDIS (TFT LCD Business unit) and it happened again when Hyundai Group mismanaged the Hyundai Engineering & Construction during the economic downturn since they were not able to pay their indebtedness in the Government banks of Korea, so the Government banks took over the HYUNDAI Engineering & Construction Group; the biggest construction company in Korea which was under the umbrella of HYUNDAI GROUP and recently acquired back by the Hyundai Motors Group.


For more Hyundai Conglomerate Group Links, may Check http://www.hikot.com/ where you could find Photos and groups of Hyundai

Hyundai Engineering's Smart management bears fruit in 3rd quarter for Billion Dollars

Hyundai Engineering & Construction’s performance went up in this 3rd quarter as the sales and operating profit, tentatively tallied on October 22, 2010 rose to 2.2741 trillion won and 176.1 billion won respectively, remaining on an uptrend in the second half of this year. Notably, 3rd-quarter operating profit was significantly up by 40.4 percent compared with the year-earlier quarter, which clearly indicates how well the company manages risks amid global financial crisis.

New orders in the 3rd quarter also increased to 5.4945 trillion won, and total new orders for this year reached 16.1888 trillion own so far. The figure was a 33 % increase from the same period a year earlier and passed the last year’s orders of 15.6996 trillion own. The company expects that given projects currently under construction, they can achieve their outlook for orders for the entire year of more than 20 trillion won.

Stronger sales were thanks mainly to the profit-oriented strategies the company has implemented since CEO Kim Joong-kyum took office to win contracts and make inroads into new markets. Hyundai Engineering & Construction could enjoy a five-year order backlog of about 55.7625 trillion won, expecting its performance to remain stable, the company’s official said.

Hyundai Motor to invest 10 trillion Korean Won in Hyundai Engineering

Hyundai Motor Group has raised the stakes in its competition with Hyundai Group to acquire Korea’s top construction company.
Hyundai Motor said on Tuesday it will invest 10 trillion won ($8.9 billion US Dollar) in Hyundai Engineering & Construction by 2020 if it succeeds in taking a controlling stake in the company.

Under a blueprint to grow Hyundai Engineering & Construction into a leading global integrated engineering corporation, the investment will be directed to boosting its capacity for infrastructure development, plant construction, renewable energy and R&D, the world’s fifth-largest carmaker said.

It set a goal for Hyundai Engineering & Construction to achieve 120 trillion won in orders and 55 trillion won in sales for 2020.
The plan also envisions that the builder will diversify its business portfolio through stepping up its presence in fields such as harbor works, chemical engineering, water plant, road construction, residential buildings and real estate, Hyundai Motor said.

Shifting its business focus to higher value-added projects from heavily construction-centered operations, the company expects to expand its 90,000 labor force to around 410,000 by 2020.

“Hyundai Engineering & Construction will be our new growth engine to become a global general engineering company,” a Hyundai Motor official said. “We’ll gather our energies to strengthen the country’s capacity in high value-added construction.”

Hyundai Motor Group, parent of the country’s two largest auto companies, submitted last month its bid for a $2.5 billion stake in Hyundai Engineering & Construction. Hyundai Group is the other competitor.
The auto giant is run by Chung Mong-koo, the son of Hyundai Group founder Chung Ju-young. His elder brother’s widow, Hyun Jeong-eun, runs the current Hyundai Group.

In April, Hyundai Motor Group’s assets were valued at about 100.7 trillion won by the Fair Trade Commission, marking the country’s second largest conglomerate. The assets of Hyun’s Hyundai Group stood at about 12.4 trillion won.

Hyundai Engineering & Construction recorded revenues of nearly 9.3 trillion won and operating profits of 418.9 billion won last year.
The builder is considered to be the foundation of Chung Ju-young’s Hyundai Group, from which the current Hyundai Group and the carmaker were spun off.

The successful bidder will acquire 34.88 percent, or a little less than 39 million shares, with the price expected to settle at between 3.5 trillion won to 4 trillion won.

Korea Finance Corporation is currently the builder’s largest shareholder with 11.12 percent of shares.

By Shin Hyon-hee (heeshin@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101019000718

Hyundai Engineering's President & CEO's Dong Wook Kim Autumn Speech of Morning Assembly (October)

Now autumn is already in the air. Sending a capricious season, it seems there will be more good things to happen this fall. We’ve just had the awards ceremony for contributors of contracts and excellent sites.

I express my gratitude;  From Honam Petrochemical P2 Project, and HCP Project obtained from the narrow domestic market, to Revamping Plant in Malaysia, Phosphatic Plant in Tunisia, and Gautami Power Plant in India, and to site manager and employees who have successfully completed overseas EPC projects.

I truly congratulate you and appreciated it.

It is needless to say, but it reminds me of saying, “Talented people are assets” especially in engineering field. The invaluable outcome has resulted from not only the directly related staff and employees, but the entire staff and employees who passionately worked together night and day to attain our goal.

I’d like to state the estimated business results for the 3rd quarter of 2010.

The sum of obtained orders is $ 1,990,000,000 (Billon) US Dollar which is 92% achievement compared to the plan, and the sales is $760 million US Dollar which is 88%, and therefore order reception and sales is somewhat behind the plan. Still, the operating profit is $110 million US Dollar, which is 105% achievement of the plan.

Our beloved employees, now it’s the 4th quarter of 2010. What is your resolution? We have to put effort on business goal achievement for this year, as well as prepare ourselves for the oncoming 2011.

Once the Korean Won keeps rising while we are aggressively competing in Middle East with European corporations such as those of Italy and Spain, the probability of order taking will get lower. Hyundai Engineering is confident globally because it is in its instinct of being technology advance, and global competitive but we anticipate the stiff competition in the Design, Engineering and Construction industry.

The intense competition is expected, since the narrower domestic market leads a number of Korean companies to enter the overseas market more rapidly.

Even the profitability doesn’t seem to get better next year. Still, the risks in market always exist, and we have been developed while seeking chances and challenging ourselves within risks. By enhancing competitiveness to overcome the challenge before blaming the adverse economic situation, there’s nothing we have to be afraid of.

There are distinctive characters among the Top ranked global corporations in ENR survey; pursuing EP&CM and high overseas sales proportion. In order to compete with them in the same market and take the dominant position, it is necessary to build a firm foundation as a global level.  In the following order, there will be a presentation regarding Indian state and culture by Mr. Ramesh from Process Plant division.

The homeland introduction of a foreign employee working for Hyundai Engineering (HEC) would be effective with its practical information and as a method of communication.  Employees shall globalize their business process and attitudes and upgrade mind in order to make a competitive organization with global competency.

Our beloved employees, now we should progress toward the vision we’ve built and challenge ourselves with constant passion.  The business goal for 2011 is to advance the Vision 2015 by 1 year, building aggressive goals. Achieving not only quantitative but qualitative goals, our company monitors the vision practice state by each department/team every six month, and gives feedback for practicing willpower.

Let’s attain the Vision 2015 in advance by steady and consistent practice.

Our beloved employees, our Company, The Hyundai Engineering has signed up for the UN Global Compact, an international agreement for the first time as a domestic engineering company, and expects to publish Sustainability Management Report soon. Through stabilizing the transparency and ethical foundation in general, and through win-win management with subcontractors and sharing management, we shall grow as a beloved and respected corporation.

I suggest to all the employees to adapt  the new international paradigm. Now it’s time to wrap up the last 3 months and plan for the next year. Next year will be busy, with the order backlog for 3 years, worth of $4,220 million.

The manpower shortage is forecasted to deepen.

To resolve the shortage problem, we should outsource the low value-added sector and improve the inefficient sector into productivity-oriented process through change and innovation.

I appreciate all the employees working overtime and during weekends to take all the job responsibilities, and I’d like to stress that we should make an enjoyable working atmosphere as much again.

Under the cold weather and busy works, please put your health care above all.

May happiness fill you and your family every day.

Thank you.