Weak global trend forces tobacco firm to delay sale (fwd)

[Robert Weissman <rob@essential.org>]

Weak global trend forces tobacco firm to delay sale
SOUTH KOREA;
Source: South China Morning Post, Wednesday, 11/17/99

An overseas share offering by Korea Tobacco & Ginseng has been postponed
due to weakness in global tobacco stocks, according to government and
international co-ordinators.

The US$740 million overseas shares sale was to have been priced at the end
of the week. The government was on its final day of meeting international
investors for the sale of up to 28.7 million shares, or 15 per cent, of
the world's biggest ginseng maker.

"The government remains committed to the privatisation of Korea Tobacco,"
a statement said.

Korea Tobacco is the fourth company to delay equity fund-raising plans
recently. Korea Exchange Bank postponed a $1 billion offering, while
Hyundai Electronics said its offering had run into trouble and Cho Hung
Bank backed away from plans.

Korea Tobacco said earlier this month the offer would go through because
of the financial health of the company. The sale would reduce the
government's stake to 81 per cent.

The state-controlled monopoly had "a virtually debt-free balance sheet"
and was the only company among Korea's 10 biggest that had net cash, Kim
Jae-hong, Korea Tobacco's president and chief executive, said at the time.

He said the company planned to use some of that cash to buy back shares.

"We do have a plan to buy back shares and it will take place next year,"
Mr Kim said.

The securities were being sold as global depositary receipts - each
representing half a share - to be traded in London.

The government and the global co-ordinators, Credit Suisse First Boston,
Warburg Dillon Read, Hyundai Securities and Dongwon Securities, said the
offering would proceed at a later date.