Kumho Tire Co.’s sale of a 42% stake to China’s Qingdao Doublestar Tyre will go ahead as planned as Kumho Asiana Group Park Chairman Sam-koo says he is giving up his right to reclaim Kumho Tire, according to Pulse News. Kumho Tire, South Korea’s second largest tyre maker, was founded by Park’s father. Park, who had the option to match Doublestar’s bid to buy back Kumho Tire shares from its creditors, complained of the “unlevelled sales process from creditors by denying him of the chance to form a consortium to finance the buyback.”
Park said in a statement that creditors led by the Korea Development Bank (KDB) had notified him that they would not allow him to form a consortium to take over the tyre company even though the preferred bidder, Doublestar Tyre, had won the preferential title in a consortium.
Due to the difficulties in coming up with at least US$839 million, Park asked creditors to allow him to get outside help by forming a consortium, arguing for the same terms as the Chinese bidder. But they finally turned down the request as the buyback right is limited to him and his eldest son.
Last month, Kumho Tire creditors signed a deal with the Chinese rival Doublestar to sell majority stake of 42% plus management rights in the company.
The Chinese company has three months to make the full payment for Kumho Tire and another month to receive government approval. Pulse News says creditors can also request a one-month extension to sign a final deal. If Doublestar, however, speeds up the purchasing process and seals the final deal, Park will not get a second chance at taking over the reins of Kumho Tire.