Hyundai is Preferred Bidder for Bankrupt Hyundai

Hyundai was designated as the preferred bidder for the bankrupt Hyundai on Friday. At a shareholders meeting held in downtown Seoul, eight major creditors approved a proposal to sign a memorandum of understanding (MOU) to sell Hyundai to Hyundai. It was reported that the proposal was passed with 98.53% of the votes.

It is expected that creditors will sign the MOU before January 15th. Hyundai is expected to then conduct due diligence on Hyundai for about four or five weeks, since it isn’t familiar with the business, before signing a binding contract with creditors.

The situation followed a court ruling on Tuesday which supported the creditors’ cancellation of the MOU with Hyundai, the bidding rival of Hyundai. In November, Hyundai was picked as the preferred bidder to to take over Hyundai – creditors however scrapped the contract after doubts were raised over Hyundai’s ability to fund the purchase of bankrupt Hyundai.

Despite the ruling, there is a possibility that Hyundai will file a series of lawsuits against the creditors of Hyundai to prevent Hyundai signing the new MOU with Hyundai.

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