SEOUL, 8 January 2004 — A bid to save South Korea’s largest credit card issuer, LG Card, from bankruptcy faltered yesterday as key creditors failed to agree on details of a rescue package. Woori Bank, the key creditor bank of LG Card, warned earlier that the troubled card firm would be put under court receivership if creditors failed to reach a bailout plan by a 5:00 p.m. (0800 GMT) yesterday deadline.
The warning came as a five trillion won ($4.2 billion) bailout package aimed at keeping the country’s largest credit card issuer afloat hit a snag over objections from some of its creditors. No resolution came as the deadline passed and a spokesman for Woori bank said talks would continue overnight in an effort to salvage a compromise.
Shares of LG Card were limit-down for a third consecutive day, plunging 14.8 percent to 2,155 won yesterday on the uncertainty over its fate. The dispute focused on demands that state-run Korea Development Bank shoulder more of the burden in bailing out LG Card, the ailing card unit of South Korea’s second largest conglomerate, LG Group.
KDB agreed last week to lead a consortium of creditors to put LG Card under joint management, with KDB holding a 19 percent stake in the company.
However, the Woori Bank spokesman said only five of 16 creditors had agreed to the proposal as the 08:00 GMT deadline for accepting the bailout offer passed. They included Woori, KDB and Industrial Bank of Korea, and two private insurance companies.
