Kumho Asiana Group averted court receivership yesterday after group Honorary Chairman Park Sam-koo and other founding members agreed to offer their stakes in group units as collateral in return for fresh loans, according to the Korea Development Bank (KDB), the group’s main creditor.
The members also agreed to manage the group’s units separately: Park Chan-koo, former chief of the group’s chemical division, will co-run Korea Kumho Petrochemical with his son; while Park Sam-koo will manage Kumho Tire and Kumho Industrial, the bank added, according to a report in the Korea Times.
Group owners hold stakes in Kumho Petrochemical and other units, worth about 250 billion won.
After family members failed to reach an agreement on how to put forward their properties to creditors by the Feb.7 deadline, the state-run KDB and other banks hinted at taking drastic steps, including putting Kumho Industrial under court receivership, to force the founding family to fulfill their promise.
They even considered placing Kumho Petrochemical, the group’s de facto holding firm, under a debt repayment program in a bid to take away management control from the family.
But with Kumho owners agreeing to fulfill their promise, KDB and nine other creditors decided Monday to proceed with the initial restructuring scheme, which will allow major shareholders to keep managerial rights for up to five years.
Creditors put Kumho Industrial and Kumho Tire under the debt repayment program on Jan. 7. Kumho Petrochemical and Asiana Airlines voluntarily signed pacts to undergo self-restructuring.
Banks had initially demanded that Kumho Petrochemical and other key units of the conglomerate be subject to the creditor-led program. But Kumho opposed the measure, saying it would lose managerial control over the entire group if the petrochemical company was put under the influence of creditor banks, the newspaper reported.
With KDB and other creditors threatening to put Kumho Industrial under court receivership and subjecting Kumho Petrochemical to creditor-led debt rescheduling programs, Kumho family members had no other choice but to give in to their demands because controlling the petrochemical products maker is a must for them to manage the entire group.
