LG Card To Be Placed Under Joint Management by Creditors

LG Card Co. will likely get out of its current impasse as its creditors have decided to collectively manage the defunct credit card issuer.

Most of about 15 banks and insurers with exposure from LG agreed in writing to joint management, Woori Bank, LG’s largest creditor, said on December 31.

The creditors also agreed to extend the maturity of all loans, including ABS, LG owes to merchant banks, investment trusts and brokerages by one year. LG has 11 trillion won in debt it has to pay by the end of next year.

“The agreement about joint management and the extension of the maturity should be finalized no later than January 2,” said a source close to the creditors. He added, “If one single creditor opposes the agreement, the joint management scheme will fall through and LG will face another shortage of funds.” Whether or not joint management is possible is not entirely clear. Some of the 16 creditors said they disagree on some details of the joint management plans. And board approval is still pending for the creditors who agreed to joint management of LG.

“Evidently, the financial regulators are hurriedly try to resolve the LG issue, flouting the process,” said another creditor.

Keuk-In Bae bae2150@donga.com