Kumho-Asiana Snags
Korea Express

Group's consortium snaps up largest logistics company with 4 tln won bid

Kumho-Asiana Group has been chosen as the priority bidder for Korea Express Co., beating three rivals in the evaluation of bids by the Seoul Central District Court No.4 Bankruptcy Department, the court announced Jan. 17.
The papers submitted by the Kumho-Asiana consortium came out on top in the evaluation by the court, getting the highest marks with the STX consortium taking second place followed by Hyundai Heavy Industries and Hanjin Group, the court said.
Korea Express went belly-up about seven years ago and was placed under the court's management, but its operations have since recovered enough to be released from the court's oversight via a public auction.
Kumho-Asiana officials said the court must have decided that they can create the best synergy through its affiliates. They will let Korea Express grow to become a global logistics company, they added. The Kumho-Asiana consortium also included Hyosung and Lotte and the winning bid came to just around 4 trillion won, sources said. They also guaranteed the jobs of Korea Express employees for five years, they said.
The group, following its take over of Daewoo Construction last year, saw its assets expand to 22.87 trillion won, ranking seventh in the country. By adding 1.5 trillion won with the acquisition of Korea Express, its assets will surpass that of Hanjin Group and move it closer to GS Group, which has total assets of 25.13 trillion won.
With Korea Express'debts scaled down to only around 700 billion won, the court looked for synergistic effects in the evaluation of the bidding papers, not simply the bid amount, sources said.
The consortium secured about 4 trillion won in funds to pay for the transportation company. Affiliates Asiana Airline and Daewoo Construction each added 500 billion won in funds. A number of banks also agreed to provide loans totaling 2 trillion won including Kookmin, Shinhan, Woori and Nonghyup. Lotte, Hyosung and some retirement funds also coughed up 1 trillion won to make up the 4 trillion won in funds.
The consortium is scheduled to sign an MOU soon and evaluate the assets and operation of Korea Express before signing an official agreement.
Korea Express was put under the court's management in 2000 due to its sluggish operation that led to default. Its operation improved a great deal lately with sales reaching 1.46 trillion won and assets of 1.61 trillion won as of the end of last year.
Its been a dominant land transportation firm, in addition to operating a home delivery service, car rental, logistics outsourcing and overseas operations. It has some 40 branches and 500 outlets across the country. The transportation company also has some 200 outlets abroad in such strategic countries as the United States and China. The company has some 6,000 employees on its payroll including more than 4,000 in Korea. The company has around 16,000 vehicles, mostly trucks. Its main assets are the real estate the company owns around the country with a total value of 900 billion won.
Its establishment goes back to 1930 as the first logistics firm under the Japanese colonial rule. In 1968, it was taken over by Dong-ah Group under a government plan to privatize it. The company played a big role in the construction of infrastructure across the country in the '70s and '80s.
The company went belly-up when its parent company, Dong-ah Construction, faced bankruptcy in 2000 while it was engaged in the construction of the Great Manmade Canal project worth some $3.3 billion in Libya since 1983. Korea Express was the guarantor for the parent company in undertaking the mammoth project.
Kumho-Asiana Chairman Park Sam-koo has emerged as a force to be reckoned with in the area of M&As in the country. The group under his direction successfully took over Daewoo Engineering and Construction last year and now followed it up with another coup with the takeover of Korea Express.
His savvy and know-how for M&As is well known throughout the business community and quickly earned him the nickname "Midas Hands,"said Kumho-Asiana officials. He is assisted by a number of able assistants headed by President Oh Nam-soo, Managing Director Lee Yong-soo and Director Hong Seung-ho. nw

Chairman Park Sam-koo of Kumho-Asiana Group.