Hyundai Motor /HMM agrees to long-term contracts

As Hyundai Merchant Marine (HMM) contracted with Hyundai Motor for long term car transportation. HMM said this contract would make it possible to issue an additional 500 billion won worth of ABS (Asset Backed Securities).

According to creditor groups and HMM on January 13, Cheong Mong-gu, chairman of Hyundai-Kia Motor, and Cheong Mong?heon, chairman of the Hyundai Asan Group, HMM and Hyundai Motor changed their one-year renewable car carrier contract to a five-year renewable.

This will permit HMM to provide 1 trillion won with 500 billion worth of ABS issues with LNG carries credits and another 500 billion worth ABS issues of car carriers.

The deal looks like Hyundai Motors is supporting HMM?s survival efforts. Creditor groups also lent their support, issuing ABS on the long-term contract.

60 ?70% of HMM?s car carrier business amounts to about 1 trillion won with 80 vessels transporting mostly Hyundai cars. Though LNG vessels, with 310 billion won annually, account for a smaller amount of business than car carrying, HMM can issue ABS with the help of 20-year long-term contracts. The car carrier business is expected to facilitate the issuance of additional ABS easily with the help of long?term contracts.

An officer at HMM said, ?The additional 1 trillion won fund will alleviate burdens from financial structures and financial operations up to the second half this year.?