Kumho Asiana Group will agree to sell airline unit if revamp fails

Asiana Airline is up for sale if restructuring plans fall through. (Reuters picture)

SEOUL: Kumho Asiana Group has told its main creditor that it will actively cooperate in selling crown jewel Asiana Airlines Inc should the South Korean conglomerate fail to implement its restructuring plan over the next three years.

The pledge was made in a revamp plan that Kumho Asiana submitted to creditor Korea Development Bank (KDB), and which included a request for financial support of 500 billion won (US$439.11 million), KDB said in a statement on Wednesday.

Kumho Asiana also promised to sell assets owned by units including Asiana Airlines to repay loans, KDB said.

Last month, group Chairman Park Sam-koo resigned as chief executive of both Asiana Airlines and its biggest shareholder, Kumho Industrial Co Ltd, after an accounting debacle rekindled concern about the group’s liquidity.

Park also pledged not to return to management at the group.

Asiana Airlines revised its 2018 accounts and disclosed a steeper annual loss to win approval from an auditor which had previously declined to sign off on them. The auditor’s initial rejection triggered warnings of credit-rating downgrades.

KDB said it will host meetings with other creditors to review Kumho Asiana’s plan.