South Korean Hanbo Steel’s sale fails again
Recent reports state that sale of Hanbo Iron and Steel Co. (Hanbo Steel) failed again yesterday, this time because of a US-based investment bank's, Lehman Brothers, withdrawal from a purchasing consortium developed for the take over.
Last February,
Korea Asset Management Company (KAMCO) which is one of Hanbo Steel's main creditors, admitted AK Capital to buy Hanbo Steel against Won 452.4 billion (approx. $380 million). However, AK Capital had difficulty in providing the required fund, partially from Lehman Brothers, for the acquisition until the set deadline, which was November 18, Tuesday. In early November, Lehman Brothers decided to grant a $85 million investment in Hanbo Steel upon AK Capital's offer of a steel mill in Tangjin.
AK Capital, which had requested an extension twice back in July and August, declared that they will request to extend the deadline for 3-4 more days. According to market reports, it is likely that its request will be rejected and a new international auction will be initiated in December with AK Capital not having the priority in bidding.
KAMCO declined that Hanbo Steel can be liquidated suggesting that company's operations are still in good-condition. Another possibility speculated is that the company can be sold in parts.
Hanbo Steel is under receivership since it filed for bankruptcy in January 1997.