In a bid to get some kind of financial support from its creditors, Kumho Asiana Group submitted a new self-rescue proposal on Monday, which includes the sale of its flagship airline unit.
The group said the board of Kumho Engineering and Construction has decided to sell off its 33.47 percent stake in Asiana Airlines, valued at over 300-million U.S. dollars.
Asiana Airlines accounts for 60 percent of Kumho Asiana Group's total sales, so its sale will come as a blow.
Once the airline is sold, Kumho Asiana Group will become a medium-sized business, with just Kumho Engineering and Construction, Kumho Buslines and Kumho Petrochemical remaining.
"The decision to sell its airline shows that former Chairman Park Sam-koo and his family have failed to assure their creditors that they can normalize the business or take care of the huge debt."
Kumho Asiana's previously proposed self-rescue plan, included handing over the founding family’s stakes as collateral and a pledge to sell off the airline unit if it failed to meet creditors' demands in three years, but was rejected by creditors last week who said it failed to show sincerity.
If the new self-resuce plan is accepted, Kumho Asiana can proceed with the sale process including selecting interested bidders.
Market analysts predict that the sale of the successful airline won't be an issue, SK Group, Hanwha and CJ Group are already being named as potential buyers.
Kim Da-mi, Arirang News.