Korea Development Bank is moving to take over three financial firms from Hyundai Group, which is selling its affiliates as part of restructuring to improve its capital flow, market sources said Monday.

Sources in the investment banking sector said KDB, the business group’s main creditor, has started due diligence on Hyundai Securities Co.

The securities firm holds a 100 percent stake in Hyundai Savings Bank Co. and Hyundai Asset Management Co., which have all been put up for sale.

Hyundai Group, undergoing a liquidity crunch, announced on Dec. 22 that it will generate 3.3 trillion won ($3.1 billion) through a self-help program that includes selling off assets and its financial affiliates.

Last week, the business group sold all of its stakes in Hyundai Oilbank Co. for an estimated 14 billion won.

The due diligence process is expected to be completed by early March with the setting up of a private equity fund and a special purpose company for the purchase negotiation process.

Hyundai Group will use the liquidity generated from selling the three firms toward settling its debt obligations. KDB will then look for prospective buyers for the financial companies.

“Nothing has been decided on who the new owner of the financial firms will be, although every company or investor who may be interested or has shown interest will be contacted,” a bank insider said. He said Hyundai Motor Group, South Korea’s second-largest family-run conglomerate, will be contacted as well.

The motor group has so far said it is not interested in buying the financial firms.

The price tag on the three firms will depend on the due diligence process, but creditor banks may not be able to receive the book value of 600 billion won, insiders watching the deal said.

The country’s stock brokerages have been hard hit by a weak market, with many reporting poor numbers last year.

The sales process, including the purchase, resale, setting up the PEF and getting permission from financial regulators, is expected to take at least six months. (Yonhap)