Written on 03.11.2010 - Industry
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KOREA (SOUTH): Creditors seeking to inject new funds to Kumho Tire

Source: Daily "The Korea Times", Seoul; 3 Nov 2010

Creditors of Kumho Tire Co. are seeking to inject new funds into the ailing tire maker and to roll over maturing loans to help the company stay afloat, sources said Tuesday.

Kumho Tire, a unit of liquidity-squeezed Kumho Asiana Group, has been under a creditor-led debt rescheduling program since its parent group has been reeling from mounting debt following its acquisition of Daewoo Engineering & Construction Co. in 2006.

According to sources, main creditor Korea Development Bank (KDB) is seeking to receive agreements from other financial investors over potential plans to inject an additional 100 billion won ($89.6 million) and to delay repayment of 140 billion won in maturing loans by 2014.

Creditors are also mulling to provide 200 billion won to Kumho Tire, which they promised earlier to supply.

The move comes as KDB, the main creditor of Kumho Asiana Group, is not planning to acquire stakes in Daewoo Engineering held by the group's affiliates, including a 5.61 percent stake owned by Kumho Tire.

(Syed Rashid Ali, Karachi, Pakistan)