By Lee Hyo-sik
The state-run Korea Development Bank (KDB) and other creditors have failed to reach a consensus on what price to dispose of their 57.5 percent stake in Kumho Industrial, the holding company of Kumho Asiana Group.
Representatives from KDB and other 21 creditors held a meeting Thursday to narrow their differences on the matter but failed to do so, according to the state-run bank.
Mirae Asset and other financial investors reportedly insisted on getting 1.02 trillion won ($833 million) for the stakes, or 59,000 won per share, including a premium for management rights and the firm's stakes in other group affiliates.
However, commercial banks sought to lower the sales price to facilitate the stake sales as Kumho Group Chairman Park Sam-koo has remained adamant that he cannot pay more than 650.3 billion won for the stakes, or 37,564 won per share.
"Creditors gathered at the KDB headquarters in Yeouido on Thursday to hammer out an agreement on the sales price of Kumho Industrial," said an official familiar with the matter. "But creditors decided to take more time and meet again to work out their differences. The date for the next meeting has not yet been set."
The latest discord among creditors will likely delay the sale of Kumho Industrial for the foreseeable future.
"We hope creditors meet again in the near future and come to their senses to speed up the sale of Kumho Industrial," a Kumho Asiana Group official said. "It just does not make sense for us to pay 59,000 won a share."
On Thursday, shares of Kumho Industrial closed 9.66 percent higher at 17,600 won.
Creditors had initially planned to decide on the sales price Thursday and hold a decision-making meeting attended by heads of creditors on Friday. They then planned to inform Kumho Chairman Park of the final sales prices.
Once informed, Park would have to decide within a month whether to exercise the buyback option at the creditor suggested price.
KDB collected opinions from 22 creditors that own more than a 0.5 percent stake in Kumho Industrial on Tuesday and Wednesday. Some creditors wanted to stick to the 1.02 trillion won price tag, while others were willing to lower the price as low as to 700 billion won to facilitate the sales process.
In April, creditors held an open bid for Kumho Industrial but only Hoban took part in the bid. The builder said it would buy the 57.5 percent stake for 600.7 billion won or 30,907 won per share, much lower than creditors' expectations.
After rejecting Hoban's bid, creditors decided not to hold an open bid and have since been negotiating with Kumho.
The sale of Kumho Industrial has been attracting keen attention from business circles because it is more than just a construction firm. It holds a 30.1 percent stake in Asiana Airlines, Korea's second-largest flagship carrier, and a 46 percent stake in Air Busan, as well as owning Kumho Terminal and the group's headquarters building in downtown Seoul.
In December 2014, Kumho Industrial, along with its affiliate Kumho Tire, graduated from a five-year-long, creditor-managed workout program. The two had to subject themselves to the workout scheme under snowballing debt amid the sluggish real estate market following the 2008 global financial crisis.
KDB and other banks that had extended credit to Kumho Asiana Group units converted their debt into equity.
Kumho Asiana Group suffered a severe liquidity crisis in 2009 after it borrowed an excessive amount of money to acquire Daewoo E&C and Korea Express.
The state-run Korea Development Bank (KDB) and other creditors have failed to reach a consensus on what price to dispose of their 57.5 percent stake in Kumho Industrial, the holding company of Kumho Asiana Group.
Representatives from KDB and other 21 creditors held a meeting Thursday to narrow their differences on the matter but failed to do so, according to the state-run bank.
Mirae Asset and other financial investors reportedly insisted on getting 1.02 trillion won ($833 million) for the stakes, or 59,000 won per share, including a premium for management rights and the firm's stakes in other group affiliates.
However, commercial banks sought to lower the sales price to facilitate the stake sales as Kumho Group Chairman Park Sam-koo has remained adamant that he cannot pay more than 650.3 billion won for the stakes, or 37,564 won per share.
"Creditors gathered at the KDB headquarters in Yeouido on Thursday to hammer out an agreement on the sales price of Kumho Industrial," said an official familiar with the matter. "But creditors decided to take more time and meet again to work out their differences. The date for the next meeting has not yet been set."
The latest discord among creditors will likely delay the sale of Kumho Industrial for the foreseeable future.
"We hope creditors meet again in the near future and come to their senses to speed up the sale of Kumho Industrial," a Kumho Asiana Group official said. "It just does not make sense for us to pay 59,000 won a share."
On Thursday, shares of Kumho Industrial closed 9.66 percent higher at 17,600 won.
Creditors had initially planned to decide on the sales price Thursday and hold a decision-making meeting attended by heads of creditors on Friday. They then planned to inform Kumho Chairman Park of the final sales prices.
Once informed, Park would have to decide within a month whether to exercise the buyback option at the creditor suggested price.
KDB collected opinions from 22 creditors that own more than a 0.5 percent stake in Kumho Industrial on Tuesday and Wednesday. Some creditors wanted to stick to the 1.02 trillion won price tag, while others were willing to lower the price as low as to 700 billion won to facilitate the sales process.
In April, creditors held an open bid for Kumho Industrial but only Hoban took part in the bid. The builder said it would buy the 57.5 percent stake for 600.7 billion won or 30,907 won per share, much lower than creditors' expectations.
After rejecting Hoban's bid, creditors decided not to hold an open bid and have since been negotiating with Kumho.
The sale of Kumho Industrial has been attracting keen attention from business circles because it is more than just a construction firm. It holds a 30.1 percent stake in Asiana Airlines, Korea's second-largest flagship carrier, and a 46 percent stake in Air Busan, as well as owning Kumho Terminal and the group's headquarters building in downtown Seoul.
In December 2014, Kumho Industrial, along with its affiliate Kumho Tire, graduated from a five-year-long, creditor-managed workout program. The two had to subject themselves to the workout scheme under snowballing debt amid the sluggish real estate market following the 2008 global financial crisis.
KDB and other banks that had extended credit to Kumho Asiana Group units converted their debt into equity.
Kumho Asiana Group suffered a severe liquidity crisis in 2009 after it borrowed an excessive amount of money to acquire Daewoo E&C and Korea Express.
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