April 24, 2024

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The top financial regulator on April 11 expressed frustration about the self-rescue plan submitted by the cash-strapped Kumho Asiana Group, calling for its founding family to show sincerity in its appeal to save its flagship Asiana Airlines.

Financial Services Commission Chairman Choi Jong-ku made the remarks a day after Kumho Asiana asked its main creditor bank, the state-run Korea Development Bank, to give an additional 500 billion won ($440 million) in financial assistance. 

Kumho Asiana also pledged to sell off Asiana Airlines if it fails to meet creditors’ demands in three years.

Asiana Airlines, the country’s No. 2 airline, has been under pressure to strengthen its financial health amid corporate challenges facing the logistics-centered business conglomerate.

Last month, Kumho Asiana Chairman Park Sam-koo stepped down as CEO of Asiana Airlines after the company widened its losses by amending its financial reports. The eldest son of Park, Se-chang, is widely expected to take over the reins of Asiana Airlines.

Last year, KDB and Asiana  signed a deal that required the carrier to secure liquidity through sales of noncore assets and the issuance of convertible and perpetual bonds.

Asiana owes financial institutions 3.2 trillion won, and it has to repay 1 trillion won of the total this year, according to the company.

By Ram Garikipati and newswires (ram@heraldcorp.com)