KDB chairman shows confidence about Kumho Tire’s turnaround

2017.09.21 13:18:32 | 2017.09.21 13:19:05

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Lee Dong-gull, chairman of Korea Development Bank (KDB), the lead creditor of Kumho Tire, struck an optimistic note about the cash-strapped tire maker’s turnaround during his first press conference Wednesday.

“Should interested parties (including shareholders, creditors and employees) share the burden, I am positive about Kumho Tire’s turnaround,” Lee said, suggesting that wage cut and debt reconstructing must be agreed upon. But he fell short of detailing a plan to normalize the tire maker. Lee was named head of the state-owned bank by the Moon Jae-in administration, replacing his predecessor Lee Dong-geol.

KDB and other creditor banks recently failed to reach an agreement to sell Kumho Tire to the preferred bidder, Doublestar, due to differences on the selling price. KDB then ordered Park Sam-koo, the chairman of Kumho Asiana Group who still holds management rights to Kumho Tire, to come up with a new turnaround plan. When asked about whether or not he will accept Park’s plan, Lee said he is currently reviewing the recently submitted plan and will meet with creditors next week to decide it.

As for the planned sale of Daewoo Engineering and Construction, the new KDB chairman also showed his confidence, saying the deal would be made sometime early next year. The bank is due to officially put up the builder for sale in the end of September.

Regarding the ongoing restructuring at Daewoo Shipbuilding and Marine Engineering (DSME), Lee said the shipbuilder turned the corner in terms of risk after two rounds of a massive injection of fresh funds. “Only 600 billion won out of the initially planned 2.9 trillion won in the second batch was used (in rescuing DSME) thanks to liquidity improvement,” Lee said. “The company is on track for a turnaround, but its survival is subject to the condition in the global shipbuilding market and we are closely monitoring it.”

By Chung Seok-woo and Noh Seung-hwan

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