Kohap Creditors Fail Rescue Plan

Creditors of Kohap failed to reach agreement on methods to normalize the company's operation, Hanvit Bank said Monday. Hanvit Bank is one of the main creditors of Kohap, which is now under a workout program.

"Only 40 percent agreed on the proposed plan to divide Kohap's core and noncore businesses and sell them separately and appoint an auditor before debt restructuring," a Hanvit Bank official said. The law requires 75 percent of votes for approval.

Bain & Company, Hanvit Bank's advisor, suggested in May a plan to separate Kohap's core business, petrochemical operation, and non-core business, chemical fider business, and dispose the noncore business as a way of restructuring.

The advisory firm also concluded that Kohap cannot survive on its own and needed to reduce its liabilities below 2 trillion won ($1.5 billion). Bain & Company suggested that creditors convert 1 trillion won out of the total debt of 3.2 trillion won to equity.

by Suh Kyoung-ho