^South Korea's bankrupt Hanbo Steel to be sold to foreigners
SEOUL, South Korea (AP) Bankrupt Hanbo Steel Industry Co., South Korea's second largest steel maker, will be sold to foreign investors later this year, its creditor banks said Monday.
The decision came after potential domestic investors, including state-run Pohang Iron and Steel Corp., the nation's No. 1 steel maker, gave up plans to take over Hanbo.
Pohang last week called back four of its executives who had worked as court-appointed managers for Hanbo since the steel firm collapsed under $6 billion in bank debts in January 1997.
Along with the return of its officials, Pohang said it also had stopped selling Hanbo products through its sales networks under an arrangement with Hanbo's creditors.
The decision to sever ties with Hanbo was aimed at avoiding trade friction with foreign countries, the statement said.
The United States and other countries have accused South Korea of unfair trade practices by allowing a state-owned company to help keep Hanbo afloat.
Hanbo, which once produced 3 million tons of steel a year, borrowed heavily from banks to finance its aggressive expansion programs. But sales lagged early last year amid an overall economic slowdown, producing a cash crunch.
In mid-1997, Pohang offered 2 trillion won ($1.4 billion) for key facilities of Hanbo, excluding its debts. Creditor banks rejected the offer, saying the price was too low.
On Monday, creditors said they will soon select a lead manager for the planned sell-off of Hanbo and complete takeover negotiations before the end of this year.
So far, about nine foreign steel companies, including USX Corp. of the United States, have shown interest in Hanbo, they said.