Kumho Asiana cuts 30 pct of executive positions

By Nam Kwang-sik
SEOUL, Jan. 18 (Yonhap) -- South Korea's Kumho Asiana Group has reduced the
number of its executives by 30 percent, the group said Monday, indicating its
strong willingness to implement structural reform aimed at tiding over liquidity
woes.

The reduction is 10 percent higher than the 20 percent cut envisioned under a
self-rescue program announced by the group on January 5.
The turnaround scheme also called for the group to trim wages of senior
executives by 20 percent, offer a month's unpaid leave to all employees and raise
1.3 trillion won (US$1.2 billion) by selling its units' assets.
Kumho Asiana dismissed seven presidents at its affiliates on Tuesday. The job
cuts have lowered the number of executives at the group to 159 from 228, it said.

Shares of the group's affiliates staged a rally on the Seoul bourse on news of
the downsizing.
Kumho Industrial Co., a construction unit of Kumho Asiana, closed up 12.44
percent to 4,925 won, while Korea Kumho Petrochemical Co. rose 5.71 percent to
end at 22,200 won. Kumho Tire Co. jumped 8.36 percent to finish at 3,565 won and
Korea Express Co. rose 1.73 percent to 58,800 won.
Kumho Asiana has faced a credit crunch since purchasing a 72.1 percent stake in
Daewoo Engineering in 2006 for 6.24 trillion won. The group borrowed some 3.5
trillion won to make the purchase.
In return for the 3.5 trillion won in financial support, the group promised
investors that it would buy back their shares if the share price of Daewoo
Engineering & Construction Co. fell below 31,500 won.
On Dec. 30 of last year, Kumho Asiana agreed with its main creditor Korea
Development Bank (KDB) to put the group's two units -- Kumho Industrial and Kumho
Tire -- under a debt rescheduling program
Kumho Asiana decided to sell its three units -- Kumho Life Insurance Co., Kumho
Rent-a-Car Co. and Daewoo Engineering & Construction -- to ride out severe cash
shortages.
ksnam@yna.co.kr
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