CONFIDENTIAL
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5.
In
March 1992 Hyundai indicated that it was unlikely that its Iraqi receivables and promissory notes would be paid at least within the next six months.
6.
that
Subsequently the Hong Kong Government suggested
a guarantee by core companies (as offered originally by Hyundai) be signed and that а letter of credit of
of US$230
million be established in Hong Kong in order to meet the
Government's need
need to be satisfied that the company could in fact meet List II listing requirements. The request for a
letter of credit is not unprecedented and is a device
ensure that, in the event of Hyundai defaulting on contract during construction, sufficient funds would
available to enable the project to be reinstated by alternative contractor.
to
the
be
an
7.
By its letter dated 10 April 1992, Hyundai declined both requests.
8.
As is normal for such tenders, the Government has given Hyundai every opportunity to put its financial position in order. The ultimate requirements were made in an honest attempt to put it in a position where the Government
could have confidence that its financial position would not
cause a high degree of risk that it would default on this
important contract. Hyundai has requested the Government to
consider accepting its original accounts as evidence of
sufficient capital to complete the project. То do So, the
Government would have to accept bad debts from the Middle East
as evidence of sufficient working capital.
acceptable to the Central Tender Board.
This is not
CONFIDENTIAL
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