Kumho Asiana Group, which owes some three billion U.S. dollars to financial institutions, has been struggling to revitalize its management since its chairman stepped down last month.
And the company was dealt another blow late last week,… after the Financial Services Commission rejected its self-rescue plan.
Kim Dami has the details.
The fate of the South Korea's number 2 airline, Asiana, is up in the air after creditors and financial regulators rejected Kumho Asiana's self-rescue plan last Friday, criticizing its failure to show sincerity.
The plan to try and resuscitate the struggling conglomerate had included handing over the founding family's stakes as collateral, including 4.8 percent held by former Chariman Park Sam-koo's wife and children, and a pledge to sell off Asiana Airlines if it fails to meet creditors' demands in three years.
In return, the conglomerate requested 440 million U.S. dollars worth of financial help from the state-run bank.
However, as a result of its unsuccessful self-rescue plan, the pressure is now on to sell its main affiliate Asiana Airline.
Meanwhile, Choi Jong-ku, chairman of the Financial Services Commission (FSC), said financial support should be aimed at resuscitating the company, not helping the Park family maintain control over it.
He also cited reports that former chairman Park, who stepped down from his role last month, will hand the reins over to his son.
“Kumho Asiana’s issue and its struggle have revealed flaws of the so called Chaebol management. The reason why it’s in so much debt is because the chairman borrowed so much money under the company. Yet he tries to keep his power under his son.”
While creditors are expected to force Kumho to submit a more credible self-rescue plan, Kumho said it will further continue negotiations with its creditors.
Kim Da-mi, Arirang News.