Hyundai Motor Group looks set to win its months-long competition with Hyundai Group to take over Korea’s top construction company.

Creditors of Hyundai Engineering & Construction, including Korea Exchange Bank, launched their preparations Wednesday to sign a memorandum of understanding with the automobile giant by as early as next week.

Their move followed a court ruling Tuesday which supported the creditors’ cancellation of the MOU with Hyundai Group to sell their controlling stakes.

At the shareholder’s meeting Wednesday, the creditors proposed that they designate the automaker as the preferred bidder. They plan to make a final decision by Jan. 7 after reviewing each creditor member’s opinion.

A passage of the proposal requires 75 percent or more votes. Should it be approved, the creditors have to sign an MOU before Jan. 15.

Later, Hyundai Motor is expected to conduct due diligence on Hyundai E&C for about four or five weeks before signing a binding contract with the creditors.

In November, Hyundai Group was picked as preferred bidder to take over 34.88 percent of the nation’s largest builder.

But creditors scrapped the contract after the group failed to clear up suspicions about its ability to fund the 5.5 trillion won ($4.7 billion) purchase.

Hyundai Group had rejected the creditors’ demand to submit loan contracts with the Paris-based Natixis bank to verify its claim that it borrowed the money without collateral or third-party guarantees.

The former preferred bidder filed for an injunction with the Seoul Central District Court on Dec. 10 against the creditors’ decision and further requested that the court block Hyundai E&C from being sold to the automaker.

Despite the ruling, there is the possibility that Hyundai Group will file a series of lawsuits against the creditors or Hyundai Motor Group. It has already expressed its intention to appeal the ruling.

The issue is how the creditors will placate Hyundai Group as a mediator.

They retain the position that they would return a deposit amounting to 275 billion won to the group, which was paid as collateral for the signing process in November, if the latter scrap its plan for further suits.

Furthermore, the creditors have said they would seek compromise between the two bidding rivals, while Hyundai Group has been desperate in its bid for the builder because its chairwoman Hyun’s grip on its flagship Hyundai Merchant Marine and affiliates is at stake.

Hyundai E&C has an 8.3 percent stake in the shipping company HMM, which in turn holds controlling stakes in seven group affiliates.

Hyundai Motor Group and its ally Hyundai Heavy Industries have a 32.29 percent stake in HMM, while Hyundai Group and its allies hold 43.4 percent.

Three months ago, Hyundai Motor Group officially expressed its intent to bid for a 35 percent stake in Hyundai Engineering & Construction, the nation’s largest builder.

Faced with an urgent need to diversify its business portfolio and to strengthen its competitiveness in the field of eco-friendly growth, Hyundai Motor is turning its attention toward the construction sector.

The automobile giant and its affiliates severed ties with the original Hyundai business group in 2000 when it was split into three separate operations, each owned by founder Chung Ju-yung’s three sons.

Hyundai Motor Group including Kia Motors is now controlled by Chung Mong-koo, the oldest surviving son of the founder, while his brother’s widow Hyun Jeong-eun controls the current Hyundai Group.

By Kim Yon-se (kys@heraldcorp.com)