Creditors warn of action, Kumho Tire's union refuses to budge

By Lim Chang-won Posted : February 27, 2018, 17:01 Updated : February 27, 2018, 17:01

[Courtesy of Kumho Tire]


SEOUL, Feb. 27 (Aju News) -- The state-run Korean Development Bank (KDB), a key policy lender, warned of strong action Tuesday as Kumho Tire's hardline union refused to endorse a self-rescue program until creditors officially exclude foreign investors in finding a new owner.

KDB has offered to extend the maturity of Kumho Tire's debt worth 1.3 trillion won (1.21 billion US dollars) by one year if unionized workers endorse a self-rescue plan. However, negotiations between management and union leaders remained bogged down.

"If the union does not agree with the self-rescue plan, there is no way to revive it. We will think about all possibilities, including a court process," KDB head Lee Dong-Gul said Tuesday. Creditors will hold a meeting this week to discuss the fate of Kumho Tire.

The union wants KDB to issue an official statement that it would not bring in any foreign investors, including Doublestar. The Chinese company agreed in March last year to secure a 42.01 percent stake in Kumho Tire, but negotiations broke down because of disputes over job security, a price cut and other thorny issues.

Kumho Tire's net loss in 2017 rose to 88.56 billion won from 37.9 billion won a year earlier. The company shifted to an operating loss of 156.9 billion won last year from an operating profit of 120.05 billion won in 2016 and sales fell 2.4 percent on-year to 2.88 trillion won.

Kumho Asiana Group chairman Park Sam-koo took his hands off Kumho Tire after creditors rejected his self-rescue package, saying his mismanagement caused Kumo Tire's liquidity crisis.
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