Court Decision Paves Way For Korea Express Revival

The Seoul bankruptcy court on Tuesday approved the restructuring plan of Korea Express Co., clearing the way for the shipper to return to normal operations.

Korea Express, the nation's largest logistics company, fell into trouble last October after Dong-Ah Construction Industrial Co., whose loans it had backed, filed for bankruptcy. Korea Express, a Dong Ah affiliate, later also declared bankruptcy. Despite these troubles, the logistics firm's operations have remained strong, with profits of 15 billion won ($12 million) this year through May.

Nearly half the 911 billion won ($706 million) of guarantees Korea Express made to the builder will be canceled by creditors. Creditors will accept equity for another 271 billion won of debt.

The court's decision will also scrap the interest portion of Korea Express' own debt 546 billion won; the firm will carry the principal portion, 429 billion won.

Under the restructuring plan, the holdings of Korea Express' current shareholders will be reduced by about five-sixths. The firm's 1.25 million treasury shares will also be retired.

While the logistics company is expected to return to normal operations, Pohang Iron & Steel and SK and Lotte groups are reportedly being considered as buyers.

by Choi Joon-ho