Park to regain control of Kumho by Dec. 30

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Park to regain control of Kumho by Dec. 30

Kumho Asiana Group chairman Park Sam-koo signed an agreement to buy a majority stake in Kumho Industrial from creditors led by the Korea Development Bank on Thursday.

Park is buying a 50 percent share plus an additional share in the construction firm, or around 17.54 million shares, for 722.8 billion won ($606.4 million), statements issued by both Kumho Asiana Group and the KDB said.

Under the agreement, Park has until December 30 to make full payment.

Acquisition of Kumho Industrial will help Park wield more power over the Kumho Asiana Group, whose businesses spans from logistics and construction to airlines. Kumho Industrial controls a 30.08 percent stake in Asiana Airlines, a key unit of Kumho Asiana Group.

The airline in turn owns 46 percent of Air Busan, a budget airline, and 100 percent of Kumho Terminal and Asiana IDT, according to a June regulatory filing.

Once the purchase is complete, Park will control a nearly 60 percent stake in Kumho Industrial, making him majority shareholder of the company and reclaiming it six years after the firm went into a debt workout program in 2009 due to liquidity problems.

Nonghyup Bank is the financial intermediary for the deal, and attention is being paid to how Park will finance it.

“Currently, there are strategic and financial investors who are helping us,” Park said in a statement.

“We still have some time (until payment is due), and we will prepare meticulously so as not to cause any problems.”

Park may use his Kumho Industrial stake as collateral in seeking funding, but there is also speculation that Park may attempt to sell Kumho Buslines, owned 100 percent by Kumho Terminal.

Industry sources say Park may seek to sell Kumho Buslines to a friendly financial institution for around 300 billion won to 400 billion won, securing enough cash to buy Kumho Industrial, and buy the company back later once enough cash has been generated from the group’s various businesses.

However, Kumho Petrochemical, which also owns 12.61 percent of Asiana Airlines, may challenge the sale on grounds that it would reduce shareholder value in Asiana.

“Chairman Park has said he will not seek funding in ways that would cause conflicts,” a spokesman said.


BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]

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