Germany’s Continental AG is said to be discussing the potential acquisition of Kumho Tire, and is just one of several tyre makers apparently interested in purchasing the company. News of this development comes at a time when Kumho Asiana Group chairman Park Sam-Koo’s efforts to regain control of Kumho Tire have run into difficulties.
The Korea Herald writes that sources linked to Kumho Tire’s creditors say Continental and financial investors have discussed bidding for Kumho Tire. The publication adds that other companies, including Michelin and ChemChina – the Chinese state-owned parent of Pirelli and Aeolus – have also apparently expressed interest in bidding.
To-date, no public announcement has been made regarding the sale of Kumho Tire, however an official sales notice is expected next month. Unsurprisingly, nobody is prepared to comment on developments prior to this announcement; The Korea Herald notes that leading creditor the Korea Development Bank has distanced itself from news of Continental’s discussions, and both Kumho Tire and Continental AG remain tight lipped on the matter.
Kumho Tire’s creditors, which together hold a 42.1 per cent stake in the tyre maker (a shareholding valued at approximately 650 billion won, or £386 million), have planned to sell their Kumho Tire shares ever since the company concluded an almost five year-long debt workout programme at the end of 2014. Park Sam-Koo currently holds an almost eight per cent shareholding in Kumho Tire, and last December he reacquired Kumho Industrial via a special purpose company that he set up. This time round, however, the use of such a company has been blocked.
The creditors met on 2 June and decided to prevent Park or his son from transferring a prior stock purchase to a third party. The Korea Times quotes a representative of one of the creditors as stating: “The creditors decided to uphold a contract term that forbids the transfer of the right to prior negotiation to a third party. We will hold a fair and open bid for Kumho Tire.”
The Kumho Asiana Group indicates it will present a plan to reacquire Kumho Tire once the creditors have officially announced their intention to sell their shares.