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S&P Puts Hyundai Motor, Kia Motors on Credit Watch

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SEOUL, Sept 21 Asia Pulse - Global rating agency Standard & Poor's said Wednesday that its long-term "BB+" ratings on Hyundai Motor Co. (KSE:05380) and Kia Motors Corp. (KSE:00270) remain on CreditWatch with positive implications following recent reports that their parent group may buy Mando Corp., a Korean auto parts maker.

"Should Hyundai Automotive Group be the successful bidder, it will take on a company that has a relatively solid credit profile," the rating agency said.

"However, the purchase price of Mando will ultimately decide whether the acquisition is positive for Hyundai and Kia's credit quality," it said, adding that a reasonable price for Mando would be about 1 trillion won-1.5 trillion won (US$970 million-US$1.46 billion).

Mando was put up for sale for 2 trillion won by JP Morgan Partners and Affinity Capital, which together own more than 70 percent of the company.

S&P said that despite the continued improvement of Hyundai and Kia's global market positions, the group continues to make overly aggressive expansion and acquisition plans.

The CreditWatch listings will be reassessed in the following two months. If the purchase terms for Mando are solidified during that time, the CreditWatch placement will be resolved, according to S&P.

However if the negotiations are prolonged, Standard & Poor's will affirm the current "BB+" ratings until further information is available, it said.

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