The move to give LG Group until today to reconsider its opposition to joining a bailout sent shares in LG Card up nearly 10 per cent at one point, though they closed almost flat.

Creditors stuck by their threat to liquidate the firm if they did not reach a deal with LG Group. But analysts have said they did not expect creditors to let the ailing firm go under, given that their losses could be greater.

The uncertainty has started to unsettle financial markets amid concerns a liquidation would present systemic risks to the economy.

LG Card has nearly seven million active customers.

``LG Group knows the impact on consumer demand and the national economy from a liquidation of LG Card,'' said Kim Yung Min, an equity strategist at Dongwon Investment Trust Management. ``Eventually, LG Group will have to participate, but they have been stalling to try to earn better concessions and see if they can cut their share of bailing out LG Card.''

A LG Group official, who asked not to be named, indicated the group would be willing to take part under the right terms. ``We want fair and reasonable guidelines to decide on the financial burden,'' he said. ``Given creditors own 99.3 per cent of LG Card and we don't, they're asking us too much.''

LG Card needs help by year's end to avoid being delisted next year - a move that creditors say would trigger massive debt redemption requests and bankrupt the firm.

LG Card owes 12.6 trillion won (HK$93.24 billion) in loans and debt securities, including 6.6 trillion won in uncollateralised debt.

REUTERS