Korea Express Co. on Sale for 700 Billion Won

Creditors of the ailing Dong-Ah group announced today that the Korea Express Co. (Korex) will be separated from the Dong-Ah Group and sold by September.

Prior to the separation of Korex from the Dong-Ah Group, creditors of Dong-Ah will replace the debt guarantees held by Korex for the Dong-Ah Group with debts. The creditors group will make a debt-to-equity swap and reduction of debts of Korex after the replacement of gurantees, in order to clear the debts held by Korex.

According to the financial sector, on March 30, a group of 46 creditors of the Dong-A group plans to hold a representatives' meeting to discuss the resolution of additional debt-to-equity swaps for the debts held by the Dong-Ah Group. Moreover, the sales plan for Korex will be determined at the creditors meeting. Currently, the Dong-A Group is under the government-sponsored debt workout program.

Creditors groups currently plan to make 'debt-to-equity swaps' in the amount of 1.8 trillion won ($1.614 billion), in addition to previous swaps last year amounting 80 billion won ($71.75 million).

The Dong-Ah Group will issue additional shares of Dong-Ah Construction at the market price raising an 1.1 trillion won in total. The capital raised by this transaction will be paid to the financial institutions holding credits. The remainder of the total debt, some 700 billion won ($627.8 million), will be paid off by selling Korex. If the sales price of Korex does not reach 700 million won ($627.8 million), additional debt-to-equity swaps will be carried out by Dong-Ah construction.

According to the source of creditors' group,"the feasible sales plan of Korex will be executed before the due date of corporate improvement agreed on May 21."

by Lim Bong-soo