Creditors are inspecting LG Card's accounts ahead of a possible stake sale after a bailout failed to dispel jitters over the viability of South Korea's largest credit card firm, reports said yesterday.
The three-week inspection began last week, with creditors already in talks with potential buyers of a controlling stake in the credit card unit of South Korea's second largest conglomerate LG Group, Yonhap news agency said.
"Creditors started due diligence on the card issuer's liquidity and profitability status," Yonhap quoted an unidentified creditor bank official as saying. "It will serve as an opportunity to assess the state of management and operations objectively."
LG Card recently avoided bankruptcy with a US$1.7 billion bailout from creditors.
Analysts, however, remain uncertain about its future because of gloomy prospects for a recovery in card usage, weak domestic consumption and rising consumer debt defaults.
International credit appraisor Fitch Ratings said last week woes in South Korea's credit card industry would persist into next year.
RSS