Creditors set to agree on debt rescheduling for Kumho units

SEOUL, Jan. 15 (Yonhap) -- Creditor banks of South Korea's cash-strapped Kumho
Asiana Group are set to agree to reschedule the debts of two of the group's units
next week in return for massive restructuring efforts, the main creditor said
Friday.

Korea Development Bank (KDB), the main creditor of Kumho Asiana, has sent
documents to other banks asking whether they agree to roll over or reschedule
debts of Korea Kumho Petrochemical Co. and Asiana Airlines Inc. by the end of
this year.
The creditors plan to clinch a deal calling for such support next week. In
exchange, the two companies must improve their finances through what will likely
be painful restructuring efforts.
They may also consider putting Korea Kumho Petrochemical, the group's de facto
holding company, under the debt workout program if its restructuring efforts do
not meet their expectations, they said.
The move is part of broader plans by the creditors to help Kumho Asiana avert a
liquidity crisis. The creditors decided on Dec. 30 to put two other ailing
affiliates -- Kumho Industrial Co. and Kumho Tire Co. -- under a debt
rescheduling program.
The group's liquidity squeeze tightened after it bought Daewoo Engineering &
Construction Co. in 2006, a transaction mostly funded by financial investors.
Kumho Asiana faces a cash call worth around 4 trillion won (US$3.56 billion) from
financial investors, who exercised their rights to sell shares in the troubled
builder back to the group at an above-market price. Kumho Industrial, the biggest
shareholder of Daewoo Engineering, must repay the amount by June 15.
sooyeon@yna.co.kr
(END)

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