S.Korea’s Asiana Airline creditors reject group restructuring plan

An Asiana Airlines Boeing 747-400 taxis at San Francisco International Airport, San Francisco, California on Feb. 7, 2015. (Reuters pic)

SEOUL: Creditors of Asiana Airlines Inc on Thursday spurned a restructuring plan proposed by parent Kumho Asiana Group, saying it was not sufficient to restore market trust in the indebted South Korean carrier.

Kumho Asiana Group’s plan, submitted on Tuesday, related to the restructuring of the entire conglomerate and was aimed at stabilising crown jewel Asiana Airlines. It included possible asset sales in return for financial support from creditors of 500 billion won (US$439.1 million).

Asiana Airline’s main creditor, Korea Development Bank (KDB), said the plan lacked practical measures such as a new share issue and sale of personal assets by members of the group’s controlling family.

“Creditors expressed a pessimistic view of Kumho Asiana’s revamp plan, raising concerns about more financial support needed for the troubled conglomerate,” KDB said in a statement.

“We will submit a new restructuring plan to our creditors and we will closely cooperate with them,” a spokesman at Kumho Asiana Group told Reuters.

The rejected plan included selling Asiana Airlines should Kumho Asiana fail to implement the plan over the next three years.

Group shares rallied on Thursday on hopes that creditors would provide funding in return for a revised plan.

Asiana Airlines saw its shares surge nearly 12.3% by 0542 GMT, while affiliates Air Busan Co Ltd and Asiana IDT Inc jumped 29.9% and 29.3%, respectively.

The airline’s biggest shareholder, Kumho Industrial Co Ltd, gained 5.3 %.