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Hankook Signs 100 Million Euro Loan in Hungary

(Clacton, U.K./Tyres & Accessories) Hankook Tire has signed a term loan agreement for 100 million euros to finance its new manufacturing plant in Hungary. The agreement was signed on Apr. 4 in Budapest, Hungary.

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Taking part in the signing ceremony were president of Hankook Tire European Regional Headquarters Suh Seung-hwa, vice president of finance Lee Jong-cheol, head of Hankook Tire Hungary Lee Eung-yong and representatives from 11 Korean and foreign banks.

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Korea Development Bank (KDB) acted as lead manager in the syndicated loan of 11 domestic and foreign banks. The Hungarian unit of Hankook Tire signed the agreement and the loan will be guaranteed by the Hankook parent company.

KDB department head Choi Chul-seong said: “The loan term is relatively long at five years and despite various difficulties such as this being the first Euro financing for Hankook Tire, we were able to procure the equivalent of 185 million euros in loans. This is nearly double the figure initially hoped for by the company. It reflects the lenders’ high opinion of the future growth potential, technological capability and stable profit-making ability of Hankook Tire.”

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In October 2005, Hankook signed an investment agreement with representatives from the Hungarian government at its Seoul headquarters. The new plant will be located on a 530-thousand square metre site in Dunaujvaros, 68 kilometres south of Budapest. The factory will produce UHP tyres for passenger vehicles and tyres for light trucks.

Construction on the factory is expected to begin in mid-May, with a goal of starting operations in the second half of 2007. When all work is completed in 2010, the Hungarian plant is projected to run at full capacity of 10 million units a year. A total of 500 million euros is expected to be invested in the plant.

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