SEOUL, Sept. 12 (Korea Bizwire) – Kumho Asiana Group, South Korea’s airline-to-construction conglomerate, said Tuesday it has submitted a self-rescue plan for its tire unit to creditors.
The move comes as the creditors asked the group to prepare a self-help program for Kumho Tire Co. by 6:00 p.m. following the collapse of a deal to sell the tire company to China’s Qingdao Doublestar.
Main creditor Korea Development Bank (KDB) confirmed that the business group had forwarded a set of measures.
“Creditor banks are reviewing the restructuring plan,” a KDB spokesman said without elaborating.
Given the recent remarks by Kumho Asiana Chairman Park Sam-koo, the measures likely include the sale of Kumho Tire’s loss-making plant in China and the injection of capital worth 200 billion won through a rights issue or other means.
In July, the group made an offer to the creditors that Chairman Park or a group affiliate will finance 200 billion won in the form of a rights issue in the case of the deal’s breakdown.
As part of the measures, the group reportedly could sell Kumho Tire’s 4.4-percent stake in Daewoo Engineering & Construction Co. to secure liquidity worth around 130 billion won.
In March, Qingdao Doublestar signed a 955 billion-won (US$844 million) contract with the creditors led by state-run Korea Development Bank (KDB) to buy a 42.01-percent stake in the country’s second-biggest tiremaker.
The deal, however, was scrapped when the creditors rejected Doublestar’s demand to cut the purchase price by 16 percent to 800 billion won, citing deteriorating earnings.
The creditors have pressured the group saying the process can be taken to dismiss Park and his senior management if the group does not file a satisfactory restructuring plan.