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Hanwha Group, a major South Korean conglomerate, said Thursday it has not received US$775 million from Iraq's National Investment Commission over a massive housing project in the war-torn nation.
An official from Hanwha said it had been scheduled to receive the upfront payment by the end of July as part of a US$7.75 billion contract to build 100,000 homes in Besmaya, located near the capital Baghdad, by 2019.
Hanwha said the actual value of the deal is expected to near around $8 billion since it is entitled to receive additional payments to reflect inflation.
The Iraqi commission signed the deal with Hanwha on May 30 when it agreed to give $775 million to the South Korean company as an advance payment within two months, the Hanwha official said.
The delay comes as Hanwha Group Chairman Kim Seung-youn was sentenced to four years in prison and 5.1 billion won (US$4.5 million) in fines for illegally using company money to pay back debts of firms he secretly ran between 2004 and 2006.
Hanwha Vice Chairman Kim Hyun-chung is in Iraq for talks with the Iraqi government and commission officials to try to resolve the issue of upfront payment, according to the Hanwha official. He did not give any further details and asked not to be identified, citing company policy.
The Iraqi commission did not immediately respond to an email seeking comment on the delay.
Last month, Seoul's land and transportation minister sent a letter to the Iraqi commission via Hanwha to ensure that Chairman Kim's imprisonment won't jeopardize the deal.
The contract, the single largest overseas project for any South Korean builder, is equivalent to more than 10 percent of the $70 billion that South Korea aims to secure in overseas orders this year.
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An official from Hanwha said it had been scheduled to receive the upfront payment by the end of July as part of a US$7.75 billion contract to build 100,000 homes in Besmaya, located near the capital Baghdad, by 2019.
Hanwha said the actual value of the deal is expected to near around $8 billion since it is entitled to receive additional payments to reflect inflation.
The Iraqi commission signed the deal with Hanwha on May 30 when it agreed to give $775 million to the South Korean company as an advance payment within two months, the Hanwha official said.
The delay comes as Hanwha Group Chairman Kim Seung-youn was sentenced to four years in prison and 5.1 billion won (US$4.5 million) in fines for illegally using company money to pay back debts of firms he secretly ran between 2004 and 2006.
Hanwha Vice Chairman Kim Hyun-chung is in Iraq for talks with the Iraqi government and commission officials to try to resolve the issue of upfront payment, according to the Hanwha official. He did not give any further details and asked not to be identified, citing company policy.
The Iraqi commission did not immediately respond to an email seeking comment on the delay.
Last month, Seoul's land and transportation minister sent a letter to the Iraqi commission via Hanwha to ensure that Chairman Kim's imprisonment won't jeopardize the deal.
The contract, the single largest overseas project for any South Korean builder, is equivalent to more than 10 percent of the $70 billion that South Korea aims to secure in overseas orders this year.
[You must be registered and logged in to see this link.]
