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Kumho family to hand over shares

February 08/2010

February, 8 ( -- The founding family of the Kumho Asiana Group agreed yesterday to hand over their shares in the groupís companies to creditor banks as collateral. The group made the decision as creditors had warned stronger measures over the familyís failure to take action to save the group from a liquidity crisis.

The Korea Development Bank, the main creditor of the group, previously said creditors might put Kumho Petrochemical, the groupís de facto holding company, under a debt rescheduling program unless the family fulfill its promise to hand over its private wealth.
Late last year, creditors decided not to put the firm under a debt workout program as the company promised it would improve its finances through restructuring.

Sources said that banks considered placing Kumho Industrial under court receivership as the creditor-led debt workout program didnít show progress.

As reports spread about Kumho Industrialís possible placement under court protection, the countryís bourse operator suspended stock trading of the construction unit yesterday. The stock price of Korea Kumho Petrochemical also plummeted 9.55 percent to 16,100 won ($13.74).

Creditors held an emergency meeting yesterday as the owner family of one of the countryís largest conglomerates missed a deadline on Sunday without offering shares they possess in affiliates or their private wealth to support efforts to rescue the debt-laden group.

Park Sam-koo, former chairman of the group and the third son of the groupís founder, failed to convince his brothers and family to offer their shares as collateral in return for debt protection, reports here said.

Sources added that Park Chan-koo, fourth son of the founder, who was dismissed from the chairman post of Korea Petrochemical by his elder brother Sam-koo, is strongly against the idea of giving his shares of Kumho affiliates.

KDB CEO Min Euoo-sung warned on Saturday that if the groupís major shareholders did not commit by Feb.7, creditors would withdraw the previous promise to guarantee them management control and would seek all possible measures within the limits of the law.
Creditors pledged to inject fresh funds worth 380 billion won into Kumho Industrial and Kumho Tire, two units of the group, late last year.

Kumho Asiana Group is suffering from a serious cash shortage after conducting a series of large-scale acquisitions in the past few years.

Kumho Industrial and Kumho Tire are currently under a creditor-led debt rescheduling program, while Korea Kumho Petrochemical and Asiana Airlines have agreements with creditors for voluntary restructuring efforts.      

Kumho family to hand over shares





































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