Creditors of South Korea's cash-strapped Kumho Asiana group are considering a capital write-down of Asiana Airlines in return for a fresh fund injection, the group's top lender said, sending Asiana shares down 15 percent.
State-run Korea Development Bank is restructuring key units including Asiana Airlines, the country's second-biggest carrier, after the conglomerate's aggressive acquisitions prompted temporary cash shortages late last year.
"We have asked major shareholders (of Asiana) to take some responsibility, including capital write-downs, in return for a new capital injection," a KDB spokesman said on Friday.
"Nothing has been decided regarding which shareholders should sacrifice how much. The capital write-down may not take place at all, if we find Asiana Airlines financially sound enough," he said.
Creditors, which have agreed to provide KRW120 billion won (USD$106 million) in financial support to the airline, plan to complete their due diligence on the company by the end of March.
The group is burdened by the cost of its 2006 acquisition of Daewoo Engineering & Construction, having agreed to buy back Daewoo shares held by financial investors at a price far above current levels. It also bought logistics firm Korea Express in 2008.
Shares in Asiana Airlines dropped 14.7 percent to a three-week low before closing down 12.5 percent at 3,700 won, versus the broader market's 0.4 percent gain
State-run Korea Development Bank is restructuring key units including Asiana Airlines, the country's second-biggest carrier, after the conglomerate's aggressive acquisitions prompted temporary cash shortages late last year.
"We have asked major shareholders (of Asiana) to take some responsibility, including capital write-downs, in return for a new capital injection," a KDB spokesman said on Friday.
"Nothing has been decided regarding which shareholders should sacrifice how much. The capital write-down may not take place at all, if we find Asiana Airlines financially sound enough," he said.
Creditors, which have agreed to provide KRW120 billion won (USD$106 million) in financial support to the airline, plan to complete their due diligence on the company by the end of March.
The group is burdened by the cost of its 2006 acquisition of Daewoo Engineering & Construction, having agreed to buy back Daewoo shares held by financial investors at a price far above current levels. It also bought logistics firm Korea Express in 2008.
Shares in Asiana Airlines dropped 14.7 percent to a three-week low before closing down 12.5 percent at 3,700 won, versus the broader market's 0.4 percent gain
