Timor car project to run as scheduled: Kia chairman
Timor car project to run as scheduled: Kia chairman
SEOUL (Reuters): The new chairman of South Korea's debt-ridden Kia Group said yesterday said Kia's plan to build assembly lines in Indonesia by 1999 was proceeding as scheduled.
Indonesia's PT Timor Putra Nasional was expected to produce 80,000 units of Kia's Sephia sedan annually with more than 60 percent of the parts to be supplied locally.
But recent reports on changes in Timor's management and the problems with Kia fanned rumors that the Kia-Timor project was in danger.
"We will honor our promises with our partners," Jin said, adding that Ford Motor Co's stake at Kia Motors would be protected. Ford now holds a 17.6 percent stake in Kia Motors.
He said that he planned to put the group's operations on track within two years through a vigorous restructuring scheme.
"Kia's troubles, which invited court receivership, provided a vital opportunity for Kia to restructure," Kia chairman Jin Nyum told Reuters in an interview.
He also said he was not thinking of a third-party takeover for the group's flagship company Kia Motors Corp and may not sell off sister company Asia Motors Co Ltd.
"Kia Motors has already secured high-levels of technology and production facilities. If we can strengthen our marketing and financing abilities, normalization of Kia Motors will be possible in a year or two," Jin said.
He said a plan to sell off Asia Motors could be shelved if it was more advantageous to merge the company with Kia Motors.
"A master plan aimed at reviving the group will come in three months. Then things about Asia Motors and others will become clear," Jin said.
In October, creditors filed for court receivership for the embattled Kia Group, following the government's decision to end the group's troubles and calm financial markets.
Finance Minister Kang Kyong-shik said at that time the government would nationalize Kia Motors by making state-run Korea Development Bank become its largest shareholder. Loans from the bank would be exchanged for Kia equity.
Kia began to falter as a lackluster business performance and rumors about a takeover by Samsung Group made creditors skittish about the survival of the country's eighth largest conglomerate.
The group amassed about 10 trillion won (US$10.1 billion) in debts by the end of May, about half owed by Kia Motors alone.
A former labor minister and economist, Jin became Kia's head this month, replacing former chairman Kim Sun-hong.
"Minister Kang promised that the government would support my plan to revive Kia Motors with Kia people," Jin said.
Last Monday, creditors agreed to give 80 billion won to Kia Motors and 120 billion to Asia Motors in emergency loans.
Creditors had earlier given 300 billion won to replace notes Kia had defaulted on with fresh ones, Jin said.
"Fund flows look all right now. Financing for our exports and car sales has resumed and in some cases expanded."
"Our creditors, altogether, promised more than one trillion won in short-term loans," Jin said.