Tesma International to buy majority stake in Hanwha Auto

SEOUL, Korea (Dec. 31) — KoreaÕs Hanwha Corp. said it will sell a 51% stake in its auto parts unit, unlisted Hanwha Automotive Components Corp, to Tesma International for $23 million US.

Tesma is a Magna International subsidiary, which operates 18 auto parts plants in North America and Europe. Hanwha Automotive makes oil and water pumps and air transmitters. The remainder of the company belongs to Ford Motor Co.

The contract calls for Tesma to take over all operations, assets, and debts of Hanwha Automotive, and to retain all employees.

Hanwha Group is KoreaÕs ninth-largest conglomerate as of last year. Due to economic recession in Korea, the countryÕs top 30 industrial groups are required by the government to reduce their debt-to-equity ratios to 200% by the end of next year from an average of 610% at the end of 1997.

This year, Hanwha Group sold parts of Hanwha Chemical Corp., Hanwha Machinery Co., Hanwha Energy Co., and other assets to both foreign and domestic companies.