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Last Updated: Thursday, 29 May, 2003, 05:40 GMT 06:40 UK
SK holds out bailout hope
An arrival at SK Global's headquarters
SK shares spiked after Mr Son's reassurances
Shares in SK Group, South Korea's fourth biggest conglomerate, have leapt as much as 30% after the chairman of the group promised that its stricken trading unit would be rescued, not ditched.

The news came ahead of a vital executives' meeting, at which the question of how to deal with the SK Global unit's debts needs to be addressed. SK Global is on the edge of bankruptcy after the unearthing of a $1.2bn accounting scandal in March.

On Wednesday, SK Global's creditors threw out a bailout proposal suggested by SK Group's board and said they would seek a court receivership instead.

But in a statement released ahead of the executive meeting, SK Group chairman Son Kil-seung pledged to protect the company's future.

"We'll certainly save SK Global," he said - although he gave no details about how.

The result was a 30.7% leap in the share price to 3,000 won at one point, although by 0530 GMT the stock was trading at 2,700 won, up 350 won or 15%.

Ugly fight

In the meantime, though, the argument about how to rescue SK Global - if at all - rages on.

SK GLobal owes $7.5bn, of which $6.5bn is owed to Koreans. The bulk of that is in the hands of a group of 11 companies being represented by Hana Bank, which seized control of SK Global in March and gave the parent three months to sort things out.

They have demanded that their debt is swapped for new shares in the trading unit, but reports say SK's offer is for only about half a billion dollars' worth.

The fight is now getting uglier, after SK Group was cut off from oil sold by its parent, the biggest refiner in the country.

SK Corp says the trading unit's creditors are refusing to pay for supplies and freezing credit lines to force its hand.

Last year, the group sold about 40% of its refined oil production through SK Global.


SEE ALSO:
Trade suspended in Korean giant
31 Mar 03  |  Business
Korean boss summonsed
05 Mar 03  |  Business


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