The Carlyle Group and LG Corp. Form an Alliance to Invest US$1.34 billion in Hanaro Telecom, Inc.

Seoul, Korea – The Carlyle Group (“Carlyle”) and LG Corp. (“LG”) announced today their formation of a consortium (“Consortium”) to contribute US$634 million in new equity funding for Hanaro Telecom, Inc. (“Hanaro” or the “Company”) at a share price of KRW3,400 per new share. Citigroup is acting as financial advisor on this transaction, including the arrangement for the Company of a US$700 million long-term debt package from the international markets in connection with the Consortium’s investment. Proceeds will be used to refinance existing debt obligations and establish the leading fixed wireline and broadband operator in Korea.

The proposed transaction calls for the issuance of new shares by Hanaro for an equity contribution of KRW736 billion by the Consortium. The subscription price of KRW3,400 per share represents a 6.3% premium to the KRW3,200 offer proposed by Newbridge/AIG and currently contemplated by the Company. The shares will be acquired by Carlyle and LG through a private placement. These new shares, combined with LG’s existing stake in Hanaro, would result in the Consortium owning 51% of the Company. LG will also take responsibility for any short-term liquidity funding requirements that Hanaro may incur until the equity injection has been completed. As part of the transaction, LG would contribute its entire 30.3% stake in Dacom to Hanaro at the market price. As a result, Dacom would become a 30.3% subsidiary of Hanaro and would remain a separate company operating on an arms-length basis with respect to Hanaro. The Consortium will not merge the two companies. Dacom will continue to be the major shareholder of Powercomm with a 45.5% stake.

Michael ByungJu Kim, Managing Director of Carlyle Asia, said, “We strongly believe the proposed transaction creates the most desirable outcome for Hanaro, its employees and shareholders and for the Korean telecommunications industry. The transaction addresses the Company’s near-term funding requirements, but, more importantly, creates an industrial group with all the elements needed to become the leading telecommunications service provider in Korea. The Consortium believes that the creation of a strategic partnership among Hanaro, Dacom and Powercomm will result in synergies, maximizing Hanaro shareholder and corporate value. Carlyle is pleased to make this investment in partnership with LG, a proven leader in cross-border joint ventures. We will jointly manage the Company with a sharp focus on transparency and shareholder value.”

President Hongshik Jung of LG Corp. said, "Our alliance creates an ideal combination of a strong local strategic owner and a leading global financial investor. We believe this deal creates an industry structure that eliminates duplicative use of national resources and strengthens Korea's role as the global leader in advanced telecommunications services. The Consortium is firmly committed to the shareholders and employees of Hanaro and ask for their support. We expect Hanaro, Dacom and Powercomm to generate significant revenue and cost synergies whil remaining separate and distinct companies that are managed to maximize value for their respective shareholders."

The transaction is subject to approval by Hanaro’s board of directors and shareholders and receipt of regulatory clearances. Carlyle and LG intend to close the transaction by the end of 2003.

About LG Corp.

LG Corp. (www.lg.co.kr/index/index.dev) is a global business group with activities focused on the four key areas of Chemicals & Energy, Electronics & Telecommunications, Finance and Services. As the second largest company in Korea, LG comprises 47 companies, 15 of these are listed on either the Korea Stock Exchange or the KOSDAQ. With revenues of US$94 billion in 2002, LG operates in 165 countries and employs 140,000 people worldwide. In March 2003, LG completed a major corporate restructuring and transformed itself into a holding company structure to improve corporate governance, transparency and shareholder value.

# # #