Kumho’s loan request gets negative response

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Kumho’s loan request gets negative response

Kumho Asiana Group is in the hot seat after both the Korea Development Bank (KDB) and Financial Services Commission (FSC) were negative about a big new loan to help its flagship airline survive a financial crisis.

The KDB, Asiana Airlines’ main creditor, said Thursday that a meeting of the company’s nine creditors Wednesday came to the conclusion that a restructuring plan would not restore trust in the company.

The KDB said the family controlling the group will need to dig into their personal wealth to turn Asiana around.

On Wednesday, Kumho Asiana Group asked creditors for a 500 billion won ($438.8 million) loan and offered a 4.8 percent stake in the group’s de facto holding company, Kumho Buslines, as collateral for the loan. The stake, owned by the wife and daughter of the conglomerate’s former Chairman Park Sam-koo, is estimated to be currently worth 20 billion won.

The FSC dismissed the proposal made by Kumho Asiana.

“We have to find out what it means that it’s asking for three years,” said Financial Services Commission Chairman Choi Jong-ku Thursday.

Kumho Asiana Group said it would not object to creditors selling Asiana Airlines if it isn’t turned around in three years.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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