Hyundai Motors to raise $473.2 million domestically for Czech factory
01 Apr 2008
"There's no place like home" seems to be the credo that Hyundai Motor Company lives by, considering its recent efforts to raise $473.2 million to help set up a $1.7 billion factory in the Czech Republic. The factory is expected to start production from March next year.
At a time when global economic markets are in turmoil, and raising money an expensive proposition, Hyundai is set to do the impossible by raising the amount easily at a competitive interest rate. The lender is the state-run Export-Import Bank of Korea (KEXIM). This is simply a continuation of the relationship that has existed between the two, since Hyundai borrowed a combined $250 million from the state-run bank in 2006 and 2007 for its second factory in India.
Both Hyundai and KEXIM officials are very enthusiastic about this development. While the former have admitted that raising capital from foreign markets in the current situation would have been costlier, the bank has reiterated its commitment towards domestic industries in the face of problems brought about the US sub-prime mortgage crisis.
Hyundai shares ended down 0.5 percent at 78,500 won, underperforming a 0.1 percent fall in the broader market. The new factory is considered to be of great importance in extending Hyundai's global reach and as a hedge against domestic concerns like currency fluctuations and labour disputes. The company currently has factories in the United States, China, India and Turkey.
The Hyundai Motor Company, a division of the Hyundai Kia Automotive Group, is South Korea's largest and the world's fifth largest automaker in terms of units sold per year. It is headquartered in the Korean capital of Seoul.
