S Korea's Kumho Asiana Group announces restructuring plan

13:48, January 05, 2010      

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South Korea's financially troubled Kumho Asiana Group announced Tuesday it will cut 20 percent of its executives, as well as their salaries, and raise 1.3 trillion won (1.13 billion U.S. dollars) by asset sales.

According to the group, which on Dec. 30 decided to put two of its units under a debt restructuring program, the downsizing will decrease the number of executives from 230 to 180, and their wages will be cut 20 percent and all the office employees will be offered a month's unpaid leave.

Kumho also plans to secure 1.3 trillion-won worth of liquidity by selling the assets of its four units, such as Kumho Industrial, Kumho Tire, Korea Kumho Petrochemical and Asiana Airlines, the group said.

While Kumho Industrial plans to raise around 477.6 billion won (416.6 million U.S. dollars) by disposing of its properties in Vietnam and Hong Kong, Kumho Tire plans a sale of its 49 percent stake in Kumho Tire (HK) Co., its Hong Kong unit, which will likely add 150 billion won (130.8 million U.S. dollars).

Korea Kumho Petrochemical is seeking treasury share sales amounting to 265.3 billion won (232 million U.S. dollars), together with Asiana Airlines that will sell its software developer Asiana IDT Inc., and its stake in Kumho Investment Bank Co., the financial unit of the group.

The group added it will keep up with its restructuring efforts until the company gets back on track.

Creditors of Kumho, however, remained skeptical of the move, saying it a merely "self-devised" plan, local media reported.

As the move is mostly what Kumho has been pushing for, a more thorough inspection is needed, media report said, citing creditors, who have shown a cautious attitude.

Source: Xinhua
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