현대건설의 구조조정과 부활- 무상감자와 대출금 출자전환을 중심으로

Hyundai Engineering & Construction Co., Ltd.(Hyundai E&C) is a successful case of corporate restructuring after falling into a liquidity crisis during the Asian Financial Crisis. When the original controlling shareholders, Chairman Jung and his family, failed to save the firm, creditors carried out two rounds of reverse stock splits and subsequent equity injections, including debt-equity swaps, to revive the firm. In the process, existing shareholders' ownership was diluted while creditor banks became majority shareholders. Reverse stock splits and subsequent equity injections strengthen the balance sheet of the firm by cancelling out the accumulated deficit and increasing shareholders' equity. Hyundai E&C also reduced production cost and its workforce as a part of restructuring, Eventually, Hyundai E&C overcame a crisis and successfully revived the firm. In 2011, creditors bank sold Hyundai E&C to Hyundai Motor Group. This case study examines the impact of reverse stock splits and equity injections - in the form of debt-equity swap and conversion of convertible bonds - on (1) financial statements, (2) stock price of the firm and (3) its existing shareholders and creditors. The case concludes with a brief analysis of the success factors of corporate restructuring and a description of the divesture of the firm in 2011 by the creditor banks. In the process, students also can learn the procedures for the corporate restructuring.