South Korea's Hyundai eyes projects in Gulf

Published May 23rd, 2001 - 02:00 GMT

South Korea's Hyundai Engineering and Construction Co is talking to Gulf Arab states in a bid to win deals worth around two billion dollars after creditors said they plan to bail out the embattled firm, a company official said. 


Dae-Yoon Kim, the company's president for Middle East and Central Asia, told Reuters in a recent interview in Muscat that Hyundai was talking to three oil-rich Gulf Arab countries in an effort to put the company back in the race for projects. 


"The South Korean prime minister has already stressed to the governments of Oman, Qatar and the United Arab Emirates (UAE) that Hyundai has overcome its financial difficulties," he said. 


"We are now ready to revive the projects we have already tendered for in these three countries and are trying to put in fresh bids in Saudi Arabia and Kuwait," he added. He said Hyundai was also eyeing new petrochemical projects in Saudi Arabia and gas projects in Iran. 


South Korean Prime Minister Lee Han-dong held talks in several Gulf Arab states earlier this month on promoting cooperation and seeking support for South Korean companies. 


Kim said Hyundai hoped to win a major power and water desalination project in the Fujairah emirate in the UAE. The UAE's Offsets Group (UOG) said earlier this month that Hyundai and France's Sidem had submitted the lowest bid for the construction of the one billion dollar project. 


"We are now negotiating with Qatar for the Ras Laffan power and desalination plant which we have jointly bid with AES Oasis Power LLC of the United States," Kim said. 


Hyundai said this month that it and its US partner for the project were selected as priority negotiating partners after they offered the lowest $388 million bid in March. But news reports said Qatar had asked AES to exclude Hyundai from the project because of its financial troubles. 


Kim said the company was also in contact with Omani officials over its bids for the $750 million oil refinery in the northern city of Sohar. Oman in June invited bids for the planned 75,000 barrels per day (bpd) refinery and officials reported the award was expected to take place this year. 


Hyundai last year won a deal to build a power plant worth $95 million owned by Oman's Al-Kamil Power Company, but Al-Kamil decided in March not to award Hyundai the contract because of its financial problems and instead offered it to Egypt's Arabian International Contractors. 


Kim said the rescue package by the creditors was helping Hyundai back into business. 

"We are not in financial trouble anymore, thanks to our creditors, who changed all the loans into equity capital and now have become shareholders of the company," he said. 


Hyundai said on Monday it would ask creditors to reschedule its foreign debt next month as part of a rescue for the nation's biggest builder. Hyundai Engineering has $920 million in foreign debt, $660 million extended by foreign creditors and the remainder by domestic lenders. 


The cash-strapped contractor posted a net loss of 2.98 trillion won ($2.29 billion) last year and entered 2001 with 8.1 trillion won in debt, about half of which matures this year. Creditors plan to provide 2.9 trillion won to Hyundai by swapping debt for equity and providing new loans to bail out the embattled builder. ― (Reuters, Muscat)  


By Saleh Al-Shaibany 


© Reuters 2001

© 2001 Mena Report (

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