Hyundai Engineering posting $2.2 billion loss

By Alex Frew McMillan
CNN.com senior writer

HONG KONG, China (CNN) -- Hyundai Engineering & Construction confirmed Wednesday it will post a loss of $2.2 billion, or 2.9 trillion won, for 2000.

The losses are much greater than expected for South Korea's largest construction company. Analysts had anticipated a loss of 235 billion won.

Rumors of pending losses sent the stock tumbling in Seoul. It was down 15.0 percent at 1,050 won just after noon Wednesday.

The company is writing off 536 billion won, or 50 percent of its receivables, on several projects in Iraq.

It is also writing off 867 billion won on other receivables that the company is unlikely to collect. Asia's troubled stock markets mean it is writing off 405 billion won on its asset holdings, mainly of stocks.

"We can't escape any loss from these sales," said Yoon Eung Hwan, the company's manager of investor relations.

He said accountants were fine-tuning the detailed numbers for release later today or early Thursday. But he said the overall loss is set.

Sales of $4.9 billion

Hyundai Engineering & Construction, part of the conglomerate Hyundai Group, had sales of $4.9 billion, or 6.4 trillion won, for the year.

Its 14 creditor banks, led by Korea Exchange, were meeting Wednesday to discuss the company.

They are expected to announce a debt-equity swap of $1.15 billion, or 1.5 trillion won.

Hyundai Engineering holds its shareholder meeting on Thursday. Like its sister company, Hyundai Electronics, the construction unit is selling off assets and cutting staff to appease creditors and reduce its heavy debt burden.

The company said in January it would raise 1.1 trillion won to pay down debt.

Hyundai Electronics stock was up 1.4 percent at midday Wednesday.

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