Creditors of Kumho Tire Co. said Friday they will push forward a debt restructuring plan for the financially troubled tiremaker as they found its self-rescue plans insufficient to pull off a turnaround, the main creditor Korea Development Bank said Friday.
With the decision, the country’s second-largest tiremaker has been placed under a creditor-led restructuring program three years after it graduated from a legally binding workout program in 2014.
That program was also led by its lenders.
“We, nine creditors, will conduct due diligence on Kumho Tire in the next one and a half months after extending debt worth 1.3 trillion won ($1.1 billion) maturing this month to the end of this year,” KDB Chairman and CEO Lee Dong-gull said in a press conference.
Kumho Asiana Group Chairman Park Sam-koo has now given up management control of the tire company and any say in the use of the tiremaker’s brand name as well as the right of first refusal, the banker said. He said creditors will be able to focus on putting the tiremaker back on track through a possible cash injection and other measures.