TNAG-2409-FCO40-3503-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1992 — Page 87

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Appendix

to Press Release

Hyundai's financial position

In order to be granted the

Tsing Ma Bridge

Contract, Hyundai, like any other contractor, had to establish

minimum levels of working and employed capital ($6,800,000 each) to be qualified for listing as a Government Approved

Contractor for Public Works.

2.

Although Hyundai was able to meet these capital requirements at the time of prequalification in early 1991, the company's position has changed since then. In August 1991, following receipt of Hyundai's audited 1990 accounts, the Government advised the company that it no longer met the listing criteria and sought information as to how the company could maintain its listing.

3.

Subsequently Hyundai made certain assurances

These assurances

were

regarding various receivables.

conditionally accepted but it was always made clear to the

company Chat its continued listing depended upon the

assurances bearing fruit at time of award of any subsequent

contract.

4.

It became apparent in the months following these assurances that Hyundai would not be able to meet them. At a

meeting with the Secretary for Works in December 1991, Hyundai

proposed that this shortfall be overcome by means of guarantees from core companies in their business group.