LIQUIDITY PROBLEMSThe foundation plans to use half of the proceeds for Hanyang University and Hanyang University Hospital in liquidity risks and put the other half on deposit, according to the disclosure.It will hold 16.6 billion won among the total value of the sale for deposit if 50% of the divestment falls short of the expected value, the foundation added.“We are facing great difficulties in the financial management of the educational foundation and affiliates amid the global economic downturn following the pandemic,” it said, adding that Hanyang University is financially challenged due to a tuition freeze for 16 straight years.
The hospital has been operating at a loss in recent years due to aging facilities and poor conditions for medical practice, and the junior doctors’ quit en masse has made the situation worse, the foundation explained.“Hanyang University Hospital is grappling with liquidity crunch as it has logged 500 million won in loss every month since this year,” an official from the hospital said.“The foundation plans to secure cash in preparation for various situations, such as support to the hospital,” the official added.
The deal value is likely to be higher than 16.6 billion won, considering the management premium and that Hanyang Securities’ stock has surged around 38% since the news on the divestment was released earlier this month, investment banking sources said.“We expect to receive the approval from the Ministry of Education soon; the sale process will start after winning the approval,” said an official from the foundation.
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