Kumho Asiana may stave off liquidity crisis

SEOUL, Nov. 22 (Yonhap) -- Kumho Asiana Group, South Korea's 10th-largest
family-run business conglomerate, is likely to stave off its liquidity crisis as
the sale of Daewoo Engineering & Construction Co. nears its final stage, industry
sources said Sunday.
Affiliates of Kumho Asiana purchased a contolling stake in Daewoo Engineering in
2006 for 6.4 trillion won (US$5.5 billion), but the transaction tipped the
conglomerate into a liquidity crunch amid funding concerns.
Under pressure from creditors, Kumho Asiana is selling its 50 percent plus one
share in Daewoo Engineering, and a preferred bidder for the sale will be
announced Monday.
The sale drew three bidders, including a sovereign fund in the Middle East and a
U.S. builder, Kumho Asiana said earlier.
If all things go as planned, Kumho Asiana could raise about 3 trillion won,
paving the way for the conglomerate to resolve a dispute with the creditors.
Under the 2006 contract to buy a major stake in Daewoo Engineering with the
creditors, who have a 39 percent stake in the builder, Kumho Asiana must buy the
creditors' stake for about 32,000 won per share, more than twice the current
market price.
Kumho Asiana has also raised nearly 2 trillion won by reducing capital at its
logistics unit, Korea Express Co., and selling stakes in other units.
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