Leading South Korean steel maker requests court receivership
SEOUL, South Korea (AP) _ Debt-ridden Sammi Group, one of South Korea’s leading steel makers, requested court receivership Wednesday in order to keep afloat.
In requesting court receivership for Sammi Steel Co. and four other subsidiaries, Sammi Group president Kim Hyun-bae said he will relinquish management control.
The request comes two months after another steel maker, Hanbo Steel Co., went broke under the weight of its $6 billion in loans.
Both companies had been pushing rapid expansion in face of a sluggish international market and steep drop in prices. For Sammi, its expansion had come at a cost of $2.1 billion in loans.
``Because of its loans and consequent costs, Sammi Steel has been unable to avoid losses for the past five years,″ Kim said in announcing his decision.
He said negotiations with South Korea’s leading steel maker, Pohang Iron and Steel Co., to sell Sammi’s two overseas subsidiaries, Sammi Atlas Inc. of Toronto, Canada, and Altech Specialty Steel Corp. of Dunkirk, N.Y., will continue.
Sammi Group is South Korea’s 26th largest conglomerate, with total assets valued at $2.9 billion.