Foreign Creditors of SK Global Oppose to Court Receivership

Foreign creditors of SK Global said Sunday that the court receivership for the beleaguered company pushed by Korean creditors is neither necessary nor desirable, proposing a solution through negotiations.

The offshore lenders said in its statement, “Foreign banks are greatly interested in the SK Global case because it is the first international test of Korea`s new Corporate Restructuring Promotion Act.”

“If foreign creditors` legal rights are prejudiced and they are treated unfairly, the cost of loans to Korean companies may rise significantly and credit lines could even be withdrawn,” warned Rod Sutton, an executive director of Ferrier Hodgson, the financial advisory firm to overseas lenders.

Offshore lenders insisted on their CBO (cash buy-out) rate of 72 percent, saying, “The rate is based on the review by an advisor company to SK Global.”

“Foreign creditors have never said they would change the previous CBO rate,” said local lenders in response. “Negotiations will be resumed only if they change the level of their demand.”

Domestic creditors plan to push for court control as soon as the entire creditors’ meeting makes a decision on July 24 unless foreign creditors lower the CBO rate to the 40 percent level.

Chi-Young Shin higgledy@donga.com