Execs to Go in Kumho Restructuring
As many as a fifth of Kumho Asiana Group executives may face the axe as part of a restructuring arrangement, the Wall Street Journal reported on January 5, The paper added that remaining management could also see their salaries shrink by 20 per cent under the terms of such a deal. The company has already indicated its intention to raise more than KRW 1.3 trillion (£695 million) through the restructuring of its assets, including the Kumho Tire and Kumho Industrial business units. Following the publication of this news the value of Kumho Tire shares plunged 15 per cent, the maximum decrease permitted in a single day.
Explaining the shape a restructuring arrangement may take, Woori Investment & Securities’ Louis Shin told the Wall Street Journal that “investors won’t buy stocks of Kumho Tire and Kumho Industrial as they will be put under a debt workout programme as part of the group’s self-rescue efforts.”
In addition to possible executive layoffs, all employees, with the exception of an unspecified number of assembly line workers, are said to be taking mandatory unpaid leave for one month. Furthermore, some employee welfare benefits are being temporarily suspended in order to reduce costs.