April 11, 2019 10:55
Kumho Asiana has turned to state-run Korea Development Bank and other creditors for a W500 billion emergency loan (US$1=W1,140). The plan will tie up in collateral the entire stake in the conglomerate's de facto holding company held by ex-chairman Park Sam-koo and his family.
If Kumho fails to improve its finances within three years, creditors have been given the right to sell subsidiary Asiana Airlines.
KDB disclosed Kumho's self-rescue plans on Tuesday. At the crux is the offer to put up 133,900 shares or a 4.8 percent stake in Kumho Buslines owned by Park's wife and daughter as collateral for the bailout.
Kumho Buslines is the de facto holding company of the conglomerate, which includes Asiana and builder Kumho Industrial. The stake gives the Park family effective control of the publicly traded group thanks to a labyrinth of cross-ownership among subsidiaries.
KDB on Wednesday said Park and his son Se-chang, the CEO of IT subsidiary Asiana IDT, own 42.7 percent of Kumho Buslines. But that stake has already been used as collateral for previous loans to affiliate Kumho Tire, so now the ex-chairman is putting up his wife's and daughter's stakes as additional collateral.
The 4.8-percent stake is valued at around W14 billion.
Park, who fell on his sword last month over Kumho's financial troubles, has also pledged to sell Asiana's affiliates and other assets and promised not to return to the helm.
KDB said it would discuss its response with other lenders depending on how seriously the market takes the self-rescue plan.
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