(LEAD) Hyundai Motor to buy KEPCO land for 10.5 tln won

(ATTN: UPDATES throughout with more details, company's statement, share prices; ADDS photo)
By Kim Eun-jung

SEOUL, Sept. 18 (Yonhap) -- Hyundai Motor Group won the bid to buy the lucrative land asset of the state-run Korea Electric Power Corp. (KEPCO) by offering 10.55 trillion won (US$10.14 billion), the power provider said Thursday.

Hyundai Motor beat Samsung Electronics to buy the 79,345-square-meter site, seen as the last sizable piece of land available for development in Seoul, to build its new global business center in the affluent Gangnam district. It was estimated to be worth more than 3.3 trillion won.

Hyundai Motor Group made its bid for the land through a consortium with two of its affiliates -- Kia Motors and Hyundai Mobis.

The world's fifth-largest car maker said it will build a global business center that incorporates its affiliates, a hotel and an auto theme park modeled after Germany's Autostadt by 2020, which will "become the group's new symbol."

"Hyundai Motor will build a global business center on the KEPCO land site, which represents the second leap for the group," the company said in a release. "Through the project, we will improve the value of the auto industry, and contribute to the national economy by attracting foreigners in the automotive industry and tourists."

The company's higher-than-expected bidding price, which is nearly triple the appraised estimate, was enough to beat that of Samsung Electronics, the flagship unit of the nation's No. 1 conglomerate.

Samsung Electronics, the world's largest handset maker and chip manufacturer, had eyed the site close to its headquarters in Gangnam to develop an information and communication technology center. Its bidding price was not immediately known.

"Because the price was decided in consideration of future value, it is not too much," a senior company official at Hyundai said, speaking on condition of anonymity.

The property was put up for sale as KEPCO is scheduled to move its headquarters to Naju, 350 kilometers south of Seoul, in November as part of the government's plan to relocate state-run companies for balanced national development.

The land sale is expected to help the state-run company's efforts to cut its debt of 107.4 trillion won by 14.7 trillion won by 2016.

"As the selling price was set at a much higher level than expectations, it would greatly help the company's efforts to improve its finances," a KEPCO official said. "The company will be able to surpass the government's goal of reducing the debt ratio."

The development of the land also ties in with the government's plans to transform the area into an international business center to fuel the country's convention industry.

The bid results lifted the share price of KEPCO but weighed down on Hyundai Motor and its affiliates in the consortium.

As of 11:15 a.m., KEPCO jumped 3.08 percent to 45,200 won in the main KOSPI market, extending its rally in the past weeks.

Hyundai Motor slipped 4.13 percent to 209,000 won. Its sister company, Kia Motors, sank 5.08 percent to 56,000 won and auto parts maker Hyundai Mobis declined 2.69 percent to 271,000 won.

ejkim@yna.co.kr
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