By Denna Bowman
Kumho tyres has been saved after creditors agreed to provide a new lifeline of $100 million in a debt restructuring programme.
Creditors will swap debts of 600 billion won for equities to keep the cash-hungry company afloat, while injecting 600 billion won in fresh capital. according to the tyres manufacturers main creditor the Korean Development Bank (KDB).
Ahn Yang-Soo, a senior director of KDB, said: “Creditors agreed to assist Kumho. We will switch company debts into stocks. We also will give additional capital to help the company manage its businesses.
“We think the rescue plan will provide Kumho the momentum to turn its business around.’’
According to a source at the Korean tyres manufacturer, the money will be used for the company’s plants in China.
Creditors also decided to reduce the capital of all shareholders, and let major shareholders take more responsibility, but declined to say how much it will be reduced.