News on 05 June

June 5, 2000

SECTION: FRONT; No. 591

LENGTH: 315 words

HEADLINE: Creditor group rejects debt restructuring for Saehan Ind.

BODY:
In a meeting held on May 27, creditors rejected the workout program for Saehan Industries Inc., which went into insolvency on May 19. Participants in the meeting said that only 58.76 percent of the creditors approved the workout application of Saehan Ind., far short of the required 75 percent or more.

However, the creditors' group approved the workout application of Saehan Media with more than 90 percent in agreement.

Creditors said they plan a second meeting, slated June 2, to discuss again the workout program for Saehan Ind. Officials at Hanvit Bank, a major creditor of the Saehan group, said, "Korea Development Bank (KDB) and Hyundai Investment Trust & Securities (HITS), which currently hold a large amount of collateral to Saehan Ind., opposed the workout."

Another Hanvit official added, "It looks like a host of creditors came to the conclusion that Saehan Ind. could normalize its management with its huge assets offered as collateral to them."

Since KDB and HITS claim 21.44 percent and 8.63 percent respectively of the total loans to Saehan Ind, they could effectively block debt restructuring for the cash-strapped company.

Creditor banks can hold up to three meetings to determine whether they approve a workout application. If there is not 75 percent agreement by then, the Corporate Restructuring Coordination Committee steps in with a compromise plan. If creditors reject the compromise offered by the committee, sources close to the situation say Saehan Ind. would have to be liquidated or placed under court receivership.

Officials at the Saehan group said that they would submit a more stringent restructuring plan containing more asset sell-offs and further wage reductions in a bid to persuade creditors.

Saehan Ind. has a total of 1.64 trillion won in debts to financial institutions and Saehan Media has debts totaling 514 billion.