LG 1999 Annual Report Download - page 39

7
3
NOTES TO FINANCIAL STATEMENTS For the year ended December 31, 1999
principal amount of such bonds, together with interest accrued to the date of redemption.
In 1998, the Company issued Won currency convertible bonds aggregating
￦
100,000 million, bearing interest at 1.0% per
annum. The bonds are convertible into common stock through November 2001, unless previously redeemed, at a specified conversion
price, subject to adjustment based on the occurrence of certain events as provided for in the offering agreement. The adjusted
conversion price as of December 31, 1999 is
￦
20,555 per share. The bonds will mature on December 31, 2001 at 112.5% of the
principal amount, unless previously converted or redeemed.
(* 3) In 1997, the Company issued foreign currency denominated exchangeable bonds totaling US$ 75 million bearing interest at 0.25% per
annum. The bonds are exchangeable into common stock of Hyundai Electronics Industries Co., Ltd. (“Hyundai Electronics,” formerly “LG
Semicon Co., Ltd.”) through November 2007, unless previously redeemed. Each bond can be exchanged for 250 shares of Hyundai
Electronics common stock with a par value of
￦
5,000. The exchange price was initially determined to be
￦
35,430 per share based
on a fixed exchange rate for U.S. dollars of US$1.00 =
￦
888.30. The terms and conditions of the exchangeable bonds are as follows :
- Basic exchange price for each share of Hyundai Electronics common stock : US$ 39.88 (
￦
35,430 /
￦
888.30)
- Payment of interest : At the end of each year
- Final redemption :
Unless previously redeemed, purchased or exchanged, the bonds will be redeemed on December 31, 2007 at their principal
amount, plus accrued interest.
- Redemption at the option of the Company :
The Company may redeem any or all of the bonds at their principal amount, plus accrued interest. However, no such
redemption can be made before July 9, 2002, unless the closing price (converted into U.S. Dollars at the prevailing exchange
rate) for each of the 30 consecutive trading days, the last of which occurs not more than 30 days prior to the date upon
which the notice of redemption is published, has been at least 135% of the exchange price in effect on each such trading
day converted into U.S. Dollars at a fixed exchange rate of US$1.00:
￦
888.30.
- Redemption at the option of the bondholders :
The bondholders may require the Company to redeem any or all (in multiples of US$ 10,000) of the bonds held by such
holders on July 8, 2002 at 133.67% of the principal amount of such bonds, plus accrued interest.
- Exchange by bondholder
Each bond is exchangeable for a pro rata share of the exchange property until November 30, 2007. The exchange property
initially comprised 1,880,397 common shares of Hyundai Electronics, calculated by dividing the aggregate principal amount
(converted into Won at a fixed exchange rate of US$1.00 :
￦
888.30) by the exchange price, but is subject to change as a
result of any adjustment to the exchange price or an offer made for the common shares.
On July 1996, relating to construction of Bundang research center, the Company entered into a land purchase agreement with Korea Land
Corporation under which the Company has acquired certain land and is obligated to pay the contracted amount on an installment basis through
2001. As of December 31, 1999, the Company has outstanding long-term other accounts payable for the agreement amounting to
￦
5,205
million.
See Notes 3 and 8 for the related collateral arrangements for the Company’s long-term debt. In addition, the repayment of a portion of
long-term debt is guaranteed by affiliated companies of the LG Group (see Note 14).
The maturities of long-term debt outstanding as of December 31, 1999 are as follows :
Millions of Won
For the year ending December 31, Debentures and Convertible bonds (* ) Long-term debt Long-term other accounts payable Total
2001
￦
1,217,000
￦
199,097
￦
5,205
￦
1,421,302
2002 100,000 158,187 - 258,187
2003 - 22,631 - 22,631
2004 30,000 10,977 - 40,977
2005 and thereafter 82,588 7,091 - 89,679
￦
1,429,588
￦
397,983
￦
5,205
￦
1,832,776
(* ) No early redemption of bonds or debentures is assumed.
12. Leases :
The Company has entered into various lease agreements for the rental of certain machinery and equipment. The Company accounts for these
leases as operating leases under which lease payment are charged to expense as incurred.
As of December 31, 1999, future lease payments under operating lease agreements are as follows :
For the year ending December 31, Millions of Won
2000
￦
45,759
2001 23,842
2002 3,018
2003 140
￦
72,759