(2nd LD) Kumho's owners to offer stakes in units as collateral

(ATTN: RECASTS headline, lead; UPDATES with more info and background throughout)
SEOUL, Feb. 8 (Yonhap) -- The family owners of the cash-strapped Kumho Asiana
Group agreed Monday to put up its entire stake in its affiliates as collateral to
creditors as they seek to secure the group's survival in return for keeping its
management rights, the group's main creditor said.

Kumho's restructuring process has been put on hold as the family has dragged its
feet in taking responsibility for mismanagement by letting a Sunday deadline pass
without taking any action.
Min Euoo-sung, chairman of Korea Development Bank, warned Sunday that creditors
would withdraw all promises -- debt rescheduling, the supply of fresh funds and
the guarantee of the owner's managerial rights -- if the family does not provide
stakes in its affiliates as collateral.
The family's decision set the stage for the group's ailing unit Kumho Industrial
Co. to avoid applying for court receivership, while creditors plan to stick to an
original overhaul plan for the group.
Kumho Industrial and Kumho Tire Co. will face restructuring under a debt
rescheduling program, while the group's other two units -- Korea Kumho
Petrochemical Co. and Asiana Airlines Inc. -- will have to improve their finances
through rigorous self-restructuring efforts as earlier agreed with creditors.
According to the group, the family holds a 47.4 percent stake in Kumho
Petrochemical and a 15.03 percent interest in Kumho Industrial.
The corporate overhaul move came as Kumho Asiana has been reeling under mounting
debt after buying a 72.1 percent stake in Daewoo Engineering & Construction Co.
in 2006 for 6.4 trillion won (US$5.46 billion), a deal mostly funded by a group
of financial investors.
The creditors agreed last week to provide fresh funds worth a combined 380
billion won to Kumho Industrial and Kumho Tire only when th family shows a
genuine commitment to taking responsibility for the groups plight.
Kumho Asiana Group owed 15.7 trillion won to financial firms including loans,
bonds and payment guarantees, according to the financial watchdog.
sooyeon@yna.co.kr
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