Kia gets fresh loans

Kia gets fresh loans

SEOUL (AFP): South Korean banks yesterday said they would extend 160 billion won (US$179 million) in emergency loans to help ease cash flow problems faced by the troubled Kia Group, a bank spokesman said.

The decision by 10 creditor banks of Kia came as suppliers for the auto maker faced the danger of chain bankruptcies, a Korea First Bank spokesman told AFP.

The money will be provided to Kia until the end of this month, he said.

"Kia has enough collateral to offer in return for the loans," he said, noting that Kia had decided to dispose of real estate worth three trillion won (US$3.4 billion) in a self-rescue plan.

The creditor banks, however, decided that the current Kia Group head, Kim Sun-Hong, and top executives should resign for a management reshuffle and that Kia Group should also spin off Asia Motors Co. which produces buses and trucks.