Creditors may mull putting Kumho Petrochemical under debt workout

(ATTN: RECASTS headline, lead; UPDATES with more info in paras 4-7)
SEOUL, Feb. 8 (Yonhap) -- Creditors of the cash-strapped Kumho Asiana Group were
to meet Monday to discuss stronger restructuring measures as the group's owners
failed to show commitment to the company's survival.
Korea Development Bank (KDB), the main creditor of the group, said the creditors
would take "extraordinary" measures as members of the group's owner family let a
Sunday deadline pass without offering their stock holdings and assets as part of
the group's survival efforts.
Min Euoo-sung, chairman of KDB, warned Sunday the creditors would withdraw all
promises -- debt rescheduling, the supply of fresh funds and the guarantee of the
family's managerial rights as the owner family is unwilling to take
responsibility for their mismanagement.
According to industry watchers, creditors are considering putting Korea Kumho
Petrochemical Co., the group's de facto holding firm, under a debt rescheduling
program. On Dec. 30, they decided not to place the firm under the debt workout
program on the promise that the company will improve its finances through massive
restructuring efforts.
KDB said the creditors will convene the meeting to decide whether to change the
current restructuring measures and plans to hold a press conference at 4:00 p.m.
Late last year, the creditors decided to put Kumho Asiana's two key units --
Kumho Industrial Co. and Kumho Tire Co. -- under a debt rescheduling program to
help the group as a whole avert a liquidity crisis after a series of reckless
takeover moves.
Market rumors that Kumho Industrial may apply for court receivership prompted
stock trading of the company to be suspended earlier in the day.
Kumho Asiana has been riddled with mounting debt after it bought a 72.1 percent
stake in Daewoo Engineering in 2006 for 6.4 trillion won (US$5.47 billion), a
deal mostly funded by financial investors.
sooyeon@yna.co.kr
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