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Korean firms rush to sell assets amid high uncertainty

Hyundai Steel's building in Seocho District (Yonhap)
Hyundai Steel's building in Seocho District (Yonhap)

South Korean businesses are increasingly selling assets in a bid to secure liquidity by hoarding cash amid high uncertainty triggered by the novel coronavirus outbreak, according to industry sources Friday.

Hyundai Steel, a steelmaking affiliate of Hyundai Motor Group, has decided to sell one of its corporate buildings in Seocho-gu, southern Seoul.

The building in Jamwon-dong, an affluent neighborhood in the area, has been used for the company’s sales operations.

“It is hard to say the company is selling the building entirely because of the coronavirus outbreak, but it is partially right to say so, because the economy seems to be getting worse,” a company official said.

The decision was actually made in 2019 as the steelmaker started integrating sales department offices that were dispersed across the city in order to raise efficiency.

“The sale will help increase liquidity, but it isn’t yet known if any buyers are out there,” the official said.

E-mart, the country’s largest retailer, recently sold land in Magok, northwestern Seoul, for 815.8 billion won ($674.3 million). The plot was to be used for building another Starfield shopping mall branch.

The company, which owns a property branch that operates the shopping mall business, has decided to rent a building in the region to open discount store Traders instead of building the shopping mall complex.

The retailer, however, stressed the sale was not abruptly decided due to the COVID-19 outbreak.

“It was part of a strategic business decision made before,” a company official said. “The Magok area was seen as overlapping with another target marketing area, Cheongna International City, where the company plans to open a new Starfield branch.”

Hyundai Department Store is similarly planning to sell its cable TV business Hyundai HCN, according to news reports.

The sale is expected to help the company earn up to 400 billion won in cash, which is likely to be used for a new business or merger and acquisition deals.

Hanjin Group has decided to sell property in Busan, Gamcheon and Seoul to secure up to 130 billion won this year.

Doosan Group also plans to sell its material solution affiliate Doosan Solus for 600 billion won, according to local media reports. 

By Song Su-hyun, Kim Da-sol and Jo He-rim