Banks to Trim Korea Express

Creditor banks of Korea Express Co. said Wednesday that they will slash the ailing transportation company's capital. Under the plan, all individual investors will see at least an 8:1 capital reduction. Combined stakes of 5.3 percent are held by the firm's chairman, Choi Won-suk, and the firm's insolvent parent company, Dong Ah Construction Co., will be retired completely.

"In order to adopt final a reorganization plan on June 12, the capital write-down is inevitable because the company issued 700 billion won ($533 million) in payment guarantees for Dong Ah Construction, far larger than its 575.1 billion won ($438 million) of net worth," said an official from the Korea Development Bank, the firm's major creditor bank. Investors, including minority shareholders, will be left with only 10 shares in the company for every 80 shares they now hold.