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.