Chairman Park Sam-gu of Kumho Asiana Group officially announced that he feels deeply about responsibilities towards Kumho Tire’s management becoming worse and that Kumho Asiana Group will give up on reacquiring Kumho Tire. Chairman Park is planning to manage Kumho Asiana Group based on Asiana Airlines, Kumho Industrial, and Kumho Buslines in the future.
“I feel deeply about responsibilities towards Kumho Tire’s performance starting to become worse in 2015 and I promised creditors that we are going to give up management rights and preemption preference of Kumho Tire.” said Chairman Park Sam-gu on the 28th at a press conference held at its company building in Sinmunno. “We have given up on reacquiring Kumho Tire and we are not going to be interested in Kumho Tire at all.”
Chairman Park promised active support towards making management normal again after selling Kumho Tire in the future. However he made an ambiguous remark of ‘providing support within legal bounds’ towards Korea Development Bank’s request of transferring trademark rights of ‘Kumho’ for free in order to resell Kumho Tire. In regards to this issue, Kumho Industrial feels that it needs to pay 0.2% (about $5.54 million (6 billion KRW)) of its annual sales as fees just like any other subsidiaries.
“Since it has been 51 years since I joined Kumho Tire and have affection towards it more than anyone else, I truly hope that Kumho Tire reformed as a wonderful company again.” said Chairman Park. “We are going to provide maximum support within legal boundaries towards issues regarding trademark rights rather than setting set boundaries.”
Chairman Park is planning to manage Kumho Asiana Group with Asiana Airlines, Kumho Industrial, and Kumho Buslines at the center in the future. Asiana Airlines is the second biggest South Korean airline. Kumho Industrial is in the 15th place out of all South Korean construction industries. Kumho Buslines is the number one express bus company in South Korea.
Chairman Park also showed his confidence towards liquidity problem of Asiana Airlines. Industries predict that financial structure of Asiana Airlines will begin to become worse in 2019 due to introduction of new accounting standards that reflect lease assets and others as liabilities.
“In case of Asiana Airlines’ liabilities, only numbers will become different due to international accounting standards and these standards will not affect its management.” said Chairman Park. “Asiana Airlines’ interest coverage ratio was about 1.6 in 2016 and we will be able to maintain that level in 2017 and we estimate that its ratio will be between 2 andd 2.2 in 2018.”
On the other hand, Kumho Asiana Group finalized governing structure by completing M&A procedure between Kumho Holdings and Kumho Buslines on the 27th. After the merger, financial structure of Kumho Asiana Group will be ‘Chairman Park Sam-gu and special relationships (50.84%) à Kumho Holdings (49.03%) à Kumho Industrial (33.47%) à Asiana Airlines’.
Staff Reporter Ryu, Jongeun | rje312@etnews.com