SEOUL, Dec 22, 2010 (AFP) – South Korea’s Hyundai Motor will likely be named preferred bidder for the country’s largest builder, a major shareholder of the builder said Wednesday, after rival Hyundai Group was pushed out of the race.

Nine creditors with a combined 34.88 percent stake in Hyundai Engineering and Construction will vote at an unspecified date on whether to name Hyundai Motor preferred bidder, Ryu Jae-Han, head of state-run Korea Finance Corp, told Dow Jones Newswires.

On Monday creditors walked away from an initial deal to sell their stake to the Hyundai Group, saying it did not give them enough information about how it would finance the reported 5.51 trillion won (4.9 billion dollar) cost.

When asked whether Hyundai Motor, which lost the preliminary deal in November, would be chosen as preferred bidder this time, Ryu said he “can’t deny” the possibility.

“I can’t deny that the current atmosphere makes it seem that way, but that’s something that the creditors need to vote on. We’ll have to see how the process plays out,” Dow Jones quoted Ryu as saying.

If the deal goes through Hyundai Motor would become the construction company’s biggest shareholder.

The takeover battle is part of a family feud over the former Hyundai empire, which was split into separate units after the death of its billionaire founder Chung Ju-Yung in 2001.

Hyundai Motor, headed by the founder’s second son Chung Mong-Koo, was hived off almost a decade ago as a separate entity. With affiliate Kia Motors, it is now the world’s fifth largest carmaker.

The construction firm came under creditor control in a debt-for-equity swap in 2001 amid lingering fallout from the 1997-98 Asian financial crisis.

The Hyundai Group — which includes a shipping firm, a brokerage, a tour company that operates projects in North Korea and an elevator maker — initially outbid Hyundai Motor for the construction firm.

The group’s chairwoman Hyun Jeong-Eun is the founder Chung’s daughter-in-law.

But creditors said Hyundai Group failed to submit detailed information about its financing of the acquisition, particularly a 1.2 trillion won loan obtained from French bank Natixis.

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Source: SGGP