Creditors of Hyundai Engineering & Construction Co. (Hyundai E&C) were to sign a preliminary deal later Friday with Hyundai Motor Group to sell the leading builder in South Korea.

   On Jan. 7, creditors, led by Korea Exchange Bank, picked South Korea's top automotive group as the preferred bidder for a 35 percent stake in the builder following a court rejection of Hyundai Group's request to salvage a takeover deal. Hyundai Motor Group lost its bid to Hyundai Group in the original bidding race.

   Creditors said they plan to sign a preliminary deal with Hyundai Motor Group at around 3 p.m. and are seeking to complete the deal by April after sealing a final contract in February.

   A takeover price is allowed to be adjusted with a range of plus or minus 3 percent from 5.1 trillion won (US$4.59 billion), the original price Hyundai Motor Group offered in the earlier bidding.

   The move comes after a Seoul court last week turned down an injunction sought by Hyundai Group to prevent creditors from scrapping the deal due to concerns about the group's ability to finance the contract.

   The spat over the builder takeover came as suspicions had flared up over Hyundai Group's capacity to finance its 5.5 trillion won preliminary deal.

   Hyundai Motor Group and creditors raised questions about the nature of a 1.2 trillion won loan borrowed by the French unit of Hyundai Merchant Marine Co. from French Bank Natixis. Creditors saw loan documents submitted by Hyundai Group as insufficient proof of the group's ability to finance the deal.

   Hyundai Group and Hyundai Motor Group use the same name and logo, but they are completely different corporate entities.

   Hyundai Motor Group, led by Chung Mong-koo, separated from Hyundai Group a decade ago. Hyundai Group -- the parent group of leading shipper Hyundai Merchant Marine and Hyundai Asan Corp. -- is controlled by Chung's brother's widow, Hyun Jeong-eun.

   Creditors acquired Hyundai E&C through a debt-for-equity swap in 2001 in a bid to save the builder from insolvency. (Yonhap News)