Creditors, Kumho Asiana to hold more talks on self-rescue plan: regulator

SEOUL, April 12 (Yonhap) -- Creditor banks and cash-strapped Kumho Asiana Group will hold more talks on the group's additional self-rescue measures, the head of the financial regulator said Friday, a day after creditors rejected the conglomerate's earlier plan.

Choi Jong-ku, chairman of the Financial Services Commission (FSC), made the remarks after nine creditor banks, led by state-run Korea Development Bank (KDB), said Thursday that the logistics-centered business group's self-rescue plan is insufficient to regain market trust, while calling for Kumho Asiana's founding family to show sincerity in its appeal to save its flagship Asiana Airlines Inc.

Asiana Airlines, the country's No. 2 airline, has been under pressure to strengthen its financial health amid deepening debt woes facing Kumho Asiana.

Asked by reporters what might happen next after creditors rejected the self-rescue plan, Choi replied, "I think that further process of consultations (with Kumho Asiana Group) will take place as creditors clarified their stance."

Earlier this week, Kumho Asiana asked the KDB to give an additional 500 billion won (US$440 million) in financial assistance, while pledging to sell off Asiana Airlines if it fails to meet creditors' demands in three years.

However, the creditor banks urged Kumho Asiana's founding family to sell its personal assets and submit a plan to raise funds via a rights offering.

Kumho Asiana Chairman Park Sam-koo stepped down last month as chief executive of Asiana Airlines after the company widened its losses by amending its financial reports.

Choi and creditor banks have also voiced opposition against the Park family's plan to keep its control over Asiana Airlines.

Last year, the KDB and Asiana Airlines signed a deal that required the carrier to secure liquidity through sales of non-core assets and the issuance of convertible and perpetual bonds.

Asiana Airlines owes financial institutions 3.2 trillion won, and it has to repay 1 trillion won of the total this year, according to the company.

Asiana Airlines swung to a net loss of 10.4 billion won last year from the previous year's 248 billion-won net profit due to currency-related losses and increased jet fuel costs.

kdh@yna.co.kr
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