Debt-ridden Kumho Asiana Group called on its creditors to inject 500 billion won ($439.17 million) to address its liquidity crisis through a business revamp plan it submitted to the state-led Korea Development Bank, according to the KDB on April 10.
|Ex-chairman of Kumho Asiana Park Sam-koo|
In the recovery plan, submitted April 9, the family-owned conglomerate agreed to sell off assets including subsidiaries owned by the group’s key air carrier unit, Asiana Airlines. The selloffs will be undertaken to repay the additional batch of liabilities.
Kumho Asiana also suggested that stakes owned by founding family members, including ex-Chairman Park Sam-koo, be given to creditors as collateral.
These include the 4.8 percent stake in the group’s holding firm, Kumho & Company, owned by Park’s wife and daughter. Also to be offered as collateral are the 42.7 percent of Kumho & Company shares held by Park and his son Park Se-chang, who heads Asiana IDT, once the family receives them back from Kumho Tire creditors.
Creditors led by the KDB intend to meet to review the revamp plan, according to the policy bank. By accepting the recovery plan, the conglomerate can avoid a corporate workout.
Kumho Asiana is due to normalize its business within three years. Otherwise, Asiana Airlines — an indirect affiliate of Kumho & Company — will be up for an unconditional sale. The deal will be managed by the KDB.
In March, Kumho Asiana Chairman Park resigned as chief executive of Asiana after its financial report with a “qualified” opinion highlighted the group’s liquidity crisis. The corrected report put its net loss at 10.4 billion won.
Park’s return to the top post is not part of the three-year normalization plan.
Asiana owes 3.4 trillion won to policy banks and financial institutions. The amount due within a year stands at some 1.3 trillion won.
By Son Ji-hyoung (email@example.com)