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Monday, 29 January, 2001, 14:31 GMT
Hyundai gets $29m damages from Iraq
Al Mussaib thermal power plant in Iraq, built by Hyundai
Hyundai has a long involvement in the Middle East
Hyundai Engineering & Construction, the debt-saddled South Korean firm, is due to receive $29.38m (20.15) in war reparations from Iraq.

The money represents the bulk of the $34.38m that a United Nations compensation commission ordered Iraq to pay Hyundai for losses associated with the 1991 Gulf war.

The $5m balance has already been paid.

Payment of the damages would give a big psychological boost to Hyundai, which has built up huge debts and was close to bankruptcy before securing a new lifeline from creditors last month.

Hyundai shares jumped by the daily limit of 15% to 2,690 South Korean won on the Seoul Stock Exchange on Monday.

Hyundai said the South Korean foreign ministry had received the money and would pay it into the company's account on Monday.

It said it hoped the payment would also improve the prospects of it receiving $850m in unpaid invoices from Iraq.

Landmark contract

Hyundai has a long history of involvement in major Middle Eastern construction projects.

In 1976, the company was awarded a landmark $958m contract to build the harbour for Jubail industrial port in Saudi Arabia, breaking the virtual monopoly in the Gulf of US engineering firms at that time.

Two years later, Hyundai won its first business in Iraq.

The company has also been prominent in Gulf construction in recent years, particularly in the power sector.

Like several other South Korean firms, Hyundai has won a reputation for bidding aggressively low and edging higher cost US and European engineers out of the market.

Other unpaid bills

At home, Hyundai has suffered severe cash flow problems. In late 2000, it had debts estimated at 4.3 trillion won ($3.4bn), which it hoped to slash by at least 500bn won by the end of this year through asset sales.

Hyundai said it also expected to collect $40m in unpaid bills from Saudi Arabia in February or March, following a $50m payment it received last year.

Last November, the Sultan of Brunei agreed to speed up the payment of $38m the country owes Hyundai for construction work.

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See also:

10 Jan 01 | Business
Hyundai's chips are down
02 Jan 01 | Business
Hyundai unveils new shake-up
20 Nov 00 | Business
Hyundai's new rescue plan
16 Nov 00 | Business
Hyundai ends family row
12 Nov 00 | Business
Hyundai faces bankruptcy deadline
19 Dec 00 | Review
Collapse of the Korean chaebol
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