Saturday, November 24, 2007

Kia Motors Considering $268.7 Million Sale Leaseback of Production Assets

Reuters - November 24, 2007

Kia Motors Corp (000270.KS), South Korea's No. 2 carmaker, plans to sell some domestic and overseas production lines and lease them back in the first half of next year in a deal that could fetch up to 250 billion won ($268.7 million), a Korean newspaper said on Saturday.

"To improve financial soundness, (the company) is seeking to sell part of Kia Motors' assets, including production lines, to a leasing company and secure cash," the Chosun Ilbo daily quoted an unnamed senior official at the automaker as saying.

Kia Motors could not immediately be reached for comment.

The report added GE Capital, a financial unit of U.S company General Electric Co (GE.N: Quote, Profile, Research), was the most likely buyer of the assets.

In October, Kia, an affiliate of top South Korean auto company Hyundai Motor Co (005380.KS: Quote, Profile, Research), had posted a bigger-than-expected quarterly net loss due to weaker sales and said it would miss its 2007 operating profit target as costs swelled.

Kia, which has factories in China and Slovakia, is building a $1 billion plant in the United States. ($1=930.3 Won) Sphere: Related Content

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