SEOUL - Kia's creditors look set to approve Hyundai's takeover of the stricken automaker, though the Korean Government still wants Ford to play a role in the company's restructuring.
Ford was the favored candidate. But it lost out in the auction of Kia and its affiliate Asia Motors because it did not offer as much as Hyundai, and demanded a greater amount of Kia's $8.4 billion debts be written off.
Before the announcement of the bidding results, creditor banks asserted their right to reject the winner. But the Korean commerce ministry warned it would have no choice but to force Kia into bankruptcy if creditors rejected Hyundai. Still, many believe Ford was the only bidder with enough financial strength to take on Kia and turn it around, and the creditors may still reject Hyundai and insist on Ford's involvement.
Ford Chairman Alex Trotman said Ford was open to a partnership with Hyundai to run Kia - at the right price. 'We're open to almost anything if it makes sound business sense,' he said. Immediately after being declared the winner, Hyundai Chairman Chung Mong-gyu said Hyundai would seek investment from foreign firms, including Ford.
The Korean government is keen to encourage such an alliance. Young Soo-gil, Korea's permanent representative to the OECD, said: 'The government regrets that Ford did not win this bidding. We wanted to see Ford come in.I think the government is nudging Hyundai to try to involve Ford as its partner.'
Ford CEO-designate Jacques Nasser told reporters at the Birmingham auto show that Ford was seeking talks with Hyundai about the future of the 16.9 percent stake in Kia it holds in combination with its Japanese affiliate Mazda.
The Kia takeover gives Hyundai global capacity of some 2.5 million cars. However, Korea has massive overcapacity - 1.5 million units last year - and Hyundai may have to close some of Kia's factories, including its old Sohari plant near Seoul and Asia Motors' sprawling Kwangju facility.