Kumho Asiana set to form single holding firm

SEOUL, July 7 (Yonhap) -- South Korea's Kumho Asiana Group said Tuesday it is
pushing to establish a single holding company after selling its controlling stake
in Daewoo Engineering & Construction Co., the nation's leading builder.
Kumho Asiana's tire-making unit, Kumho Industrial Co., and its chemical unit,
Korea Kumho Petrochemical Co., currently serve as holding firms for South Korea's
seventh-largest conglomerate.
The group said Kumho Industrial will be unable to meet the requirements for a
holding company after it sells its over 72 percent of Daewoo Engineering &
Construction.
Last month, Kumho Asiana said it will sell its 72.11-percent stake in Daewoo
Engineering & Construction in an effort to weather a cash shortage. The group
bought the shares for 6.42 trillion won (US$5 billion) in June 2006.
Under South Korean law, the value of subsidiaries' shares owned by a holding
company should not fall below 50 percent of their total assets. The sale of
Daewoo Engineering & Construction is expected to make Kumho Industrial unable to
reach the threshold.
In connection with the group's plan to convert into a single holding firm system,
Korea Kumho Petrochemical Chairman Park Chan-koo has disposed of his 4.84-percent
stake in Kumho Industrial in the past one-month period.
Park has also purchased additional shares in Korea Kumho Petrochemical,
increasing his interest in the company to 9.18 percent from his previous 7.3
percent. His family members also raised their stakes in the petrochemical maker.
"Park's share purchase is intended to convert Korea Kumho Petrochemical into a
single holding company for Kumho Asiana," a group official said.
The group, which also owns the nation's second-largest passenger carrier, Asiana
Airlines, has been dogged by growing concerns over its liquidity condition since
its purchase of Daewoo Engineering & Construction.
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