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Creditors to OK restructuring plan for Kumho Tire Fri
By Kim Bo-gyungPublished : Sept. 28, 2017 - 19:29
Creditors of Kumho Tire Co. are set to agree on a debt restructuring plan for the financially troubled tiremaker as the company's self-rescue plans failed to meet their expectations, main creditor Korea Development Bank said Thursday.
On Sep 12, Kumho Asiana Group submitted a self-help plan for its tire unit to the KDB-led creditors following the collapse of a deal to sell the country's No. 2 tiremaker to China's Qingdao Doublestar.
"After reviewing the self-help program, creditors found it insufficient to put the debt-ridden tiremaker back on track," a KDB spokesman said over the phone.
On Sep 12, Kumho Asiana Group submitted a self-help plan for its tire unit to the KDB-led creditors following the collapse of a deal to sell the country's No. 2 tiremaker to China's Qingdao Doublestar.
"After reviewing the self-help program, creditors found it insufficient to put the debt-ridden tiremaker back on track," a KDB spokesman said over the phone.
Given the recent remarks by Kumho Asiana Chairman Park Sam-koo, the self-help measures likely included 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.
Moreover, the group reportedly said it could sell Kumho Tire's 4.4 percent stake in Daewoo Engineering & Construction Co., the construction unit of the airline-to-chemical conglomerate, to secure liquidity worth around 130 billion won.
The creditors had pressured the group saying action can be taken to dismiss Park and his senior management if the group does not file a satisfactory restructuring plan.
On Thursday, creditors appointed Senior Executive Vice President Sohn Bong-young as the new "representative" of the tiremaker, a Kumho Tire spokesman said. The appointment comes immediately after Kumho Tire's Chairman and co-CEO Park Sam-koo and President and co-CEO Lee Han-seob stepped down.
Sohn, 61, started his career at Kumho Tire in 1986 and has been mainly involved in the company's R&D activities and global production technology division.
On Friday, the KDB is set to hold a press briefing at its headquarters in Yeouido, Seoul, at 2:00 p.m. to answer questions about creditors' restructuring plan for the tiremaker.
In March, Qingdao Doublestar signed a 955 billion won ($832.2 million) contract with creditors 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.
In the January-June period, Kumho Tire's net losses deepened to 108 billion won from 22 billion won a year earlier. At the end of June, it owed 2.74 trillion won to financial institutions. (Yonhap)
