Success in Collections
Hyundai Rotem has resumed its suspended project while collecting all the payments unpaid from a railway project in Iran through the support of the South Korean government, Korean oil refineries, and financial institutions.
Hyundai Rotem, an affiliate of the Hyundai Automotive Group, said on August 19 that it has got back 83.5 billion won (US$74.7 million) in outstanding payments from a project of supplying 150 diesel trains to Iran.
All of the problems surrounding unpaid receivables, accordingly, have been solved, which were arisen by the sanctions that the US imposed against Iran in July 2010. The Hyundai Motor affiliate, in particular, is positioned to complete the halted project by receiving even the outstanding payments for trains, whose delivery it could not complete.
In November 2004, Hyundai Rotem signed a contract with RAJA, a state-owned enterprise under the national Islamic Republic of Iran Railways, to supply 150 diesel trains. Then, RAJA paid 15 percent of the total amount as a down payment and agreed to pay the remaining 85 percent with loans that it would takes out from the Export-Import Bank of Korea. Hyundai Rotem started delivering trains from late 2007, but the sanctions against Iran halted the project, with its payments unpaid.
As economic sanctions against Iran were lifted in January this year, however, discussions were made to compensate in crude oil for the outstanding payments, and in June the way for the payments was decided at a ministerial meeting hosted by Iranian First Vice-President.
Hyundai Rotem plans to complete the delivery of the remaining trains by 2018 which has been interrupted by the sanctions on Iran.