Creditors of crisis-hit Kumho Asiana Group, including Korea Development Bank (KDB), have rejected the former chairman Park Sam-koo’s restructuring plan, which included a promise to sell Asiana Airlines Inc. if the group fails to normalize its operation within three years.
KDB, the main creditor of Asiana Airlines, announced on April 11 its official position on Kumho Group’s restructuring plan which was submitted the day before. The bank said, “It is not sufficient to regain the trust of the market. The group needs to come up with a new restructuring plan if it wants to persuade the creditors.”
It also said, “The nine banks, which attended the creditors meeting held on the day before, responded negatively to the plan. They said the group’s plan to raise funding in the financial market is not reliable and therefore could increase creditors’ financing burden in the future even they extend 500 billion won (US$438.40 million) worth of loans as requested by the group.”
An official from the creditors said, “The value of the 4.28 percent stake in Kumho Buslines Co. that Park said he would give it to creditors as additional collateral for the loan is far from enough for the 500 billion won (US$438.40 million) of the loan the group requested. The sale of Asiana Airlines within three years doesn’t seem to be a genuine restructuring plan.” He put pressure on Park to allow the creditors to sell Asiana Airlines as they please.
KDB’s announcement came right after Choi Jong-ku, chairman of the Financial Services Commission (FSC), commented on Kumho Asiana’s restructuring plan. Choi said, “Asiana Airlines has had enough time (to normalize its operation). In some ways, the firm was given 30 years of time. The creditors should ponder over the meaning of the group’s request for three more years as it is in a liquidity crisis.”