Kia creditors agree to 183.1b won loan
Kia creditors agree to 183.1b won loan
SEOUL (Reuter): Creditor banks to South Korea's Kia Group agreed to grant 183.1 billion won in emergency loans to four Kia affiliates under certain conditions, the Korea First Bank president said yesterday.
Korea First's president Ryoo Shee-yul told reporters creditors would extend 60.7 billion won to Kia Motors and 76.6 billion won to Asia Motors. Kisan would get 20.8 billion and Kia Steel 25 billion.
But those loans would be granted only when presidents of Kia affiliates, including chairman Kim Sun-hong, tendered resignation letters and the labor union agreed in writing to freeze their wages and reduce the number of employees.
Ryoo urged the union to drop their demand to retain the right to withdraw from their agreement, if creditors forced executives to resign or allowed a third party to take over Kia.
Korea First's president Ryoo Shee-yul told reporters creditors would extend 60.7 billion won to Kia Motors and 76.6 billion won to Asia Motors. Kisan would get 20.8 billion and Kia Steel 25 billion.
But those loans would be granted only when presidents of Kia affiliates, including chairman Kim Sun-hong, tendered resignation letters and the labor union agreed in writing to freeze their wages and reduce the number of employees.
Ryoo urged the union to drop their demand to retain the right to withdraw from their agreement, if creditors forced executives to resign or allowed a third party to take over Kia.
Meanwhile, a defiant Kia Group chairman Kim Sun-Hong declared Monday a desperate battle against any move to take over the near- bankrupt automotive conglomerate.
"I stake my life on turning our business around," Kim said in a ceremony at which he was presented with a box packed with the signatures of Kia's 30, 000 personnel showing their solidarity.
In a resolution, 100 Kia directors, buoyed by their successful campaign to raise emergency company funds, pledged loyalty to Kim who has been under ever-increasing pressure by creditor banks to resign.
"We will unite firmly to overcome our crisis," the resolution said.
AFP reported that the resolution coincided with the third round of talks Monday among the creditors to discuss a final decision over whether to save Kia or force it to be taken over.
But the resolution failed to ease widespread concern among Kia's subcontractors over domino bankruptcies following the weekend insolvency of Seoul Auto Body Products Corp. (SELBO), a commercial vehicle parts maker.
SELBO was the ninth of Kia's main subcontractors to go down since the group was put under bank protection on July 15.
Kia officials blamed a delay in bail-out loans by creditors who have refused to budge from their hardline stance, asking Kim Sun-Hong and other directors to resign.
The group unveiled a drastic downsizing plan last week, but creditors rejected it as insufficient and lacking in details.
The creditors also pushed the resignation of Kia directors before going through with $210 million in lifeline loans already dangling in front of Kia.