'Asiana Airlines was everything to me'

By Kwak Yeon-soo

Former Kumho Asiana Group Chairman Park Sam-koo / Korea Times file

Former Kumho Asiana Group Chairman Park Sam-koo apologized to Asiana Airlines employees in a memo, Tuesday, bidding farewell after 17 years as head of the group.

On Monday, the group decided to put Asiana Airlines up for sale in return for fresh loans from creditors.

The group's decision came after creditors, led by the state-run Korea Development Bank (KDB) and the Financial Services Commission (FSC) rejected its self-rescue plan, demanding more concrete action.

“I am deeply sorry for any pain and shock the result may cause,” he said. “I ask for your understanding that the decision was inevitable in order to overcome the company's difficulties.”

Park stepped down as group chairman and chief executive of Asiana Airlines and Kumho Industrial in March so as not to interfere with the business normalization of Asiana Airlines.

“Asiana Airlines has been a significant part of my life. Each stop along the way was filled with new challenges to endure, including the 1997 Asian financial crisis, September 11 attacks, Severe Acute Respiratory Syndrome, Middle East Respiratory Syndrome and the financial crisis in 2008,” he said.

With the selling of Asiana Airlines, which accounted for 63.7 percent, or 6.2 trillion won, of Kumho Asiana Group's annual sales in 2018, the group is expected to shrink sharply.

Kumho Asiana Group is likely to fall into a mid-size company as the group's total assets are expected to be reduced to 4 to 5 trillion won from current 11.4 trillion won.

This could push down the group's ranking to below 60th. According to the Fair Trade Commission, Eugene Group and Hansol Group ranked 59th and 60th by assets with their total standing at 5.3 trillion won and 5.1 trillion won, respectively.

The sale of Asiana Airlines, the group's main subsidiary, may also put the fate of its subsidiaries at risk.

The nation's second-largest carrier owns 44.2 percent of Air Busan, 76.2 percent of ICT service company Asiana IDT, 80 percent of travel reservation service provider Asiana Sabre and 100 percent of budget airline Air Seoul, cargo handling operator Asiana Airport and a cargo terminal construction unit Asiana Development.

Since Park took power in 2002, Kumho Asiana Group has risen up to the seventh rank in terms of assets after acquiring Daewoo E&C in 2006 and CJ Logistics in 2008.

The company, however, was hit hard by the 2008 financial crisis and suffered a severe liquidity crisis caused by overspending on Kumho Group's acquisition of Daewoo E&C.

Its rank dropped to the 25th place after the group lost control of its flagship affiliates, including Daewoo E&C in 2009, CJ Logistics and KDB Life in 2010, Woori Investment Bank in 2014 and Kumho Tire in 2017.