Loan extension to be discussed by Kumho Tyre’s creditors
Creditors of South Korea’s Kumho Tyre plan will convene to discuss whether to extend the maturity date of 1.3 trillion won ($1.2 billion) worth of debt due next month, a spokesman from a creditor bank said this week. The representative from state-run Korea Development Bank told media: “It is only reasonable for Kumho to pay back the loan due on June 30 by selling its tyre unit, and request a five-year extension for the remaining debt.
Kumho Tyre’s branch in China has not been able to make payments for almost seven years due to poor sales. Also, Kumho Asiana Group still has debt to pay back from buying back two of its units.” China’s state-run tyre maker Doublestar, which is currently in negotiations to acquire Korea’s second largest tyre company, had requested a five-year extension of the due date for the total 2.2 trillion won debt Kumho owes to the nine creditors, according to the KDB. The total figure includes debt owed by Kumho Tyre’s overseas corporations.
The Korea Development Bank, which holds about 50% of the loan, has agreed on a five-year extension, while the second-biggest creditor Woori Bank is willing to postpone the maturity date by two years. Woori Bank holds a 34% voting right among creditors. At least 75% of the creditors need to approve the extension for it to pass. Creditors will meet no later than early June to make a decision.