Creditors, Doublestar Tire receive final offer for use of Kumho brand name
Negotiations over the use of the Kumho brand name are drawing to a conclusion, with Park Sam-Koo and the board of Kumho Industrial Co. announcing their final offer following a meeting yesterday. This offer centres on the payment of 0.5 per cent of Kumho Tire’s sales in brand royalties for 12.5 years and a clause ensuring that Doublestar uses the Kumho name for the entire period.
While this offer differs greatly from that originally sought by potential 42.01 per cent shareholder Qingdao Doublestar Tire (a payment of 0.2 per cent of sales for rights to the Kumho name for a five-year period, with the option of extending this for a further 15 should market conditions be favourable), it bears a close resemblance to the proposal delivered by Kumho Tire’s on 7 July. But it’s a case of so near and yet so far – while Park and the board agree with the creditors’ numbers, Kumho Industrial insists that the entire 0.5 per cent payment should come from Doublestar alone. The creditors proposed paying 0.3 per cent themselves to make up the shortfall left after Doublestar, the actual user of the brand name, pays just 0.2 per cent.
Kumho Industrial’s offer keeps alive Park Sam-Koo’s own hope of acquiring the Kumho Tire share. The procedure for selling the 42.01 per cent share in Kumho Tire must be completed by 23 September. Should the creditors not complete the transaction by this date, the sales and purchase agreement signed with Doublestar will become void and it will become necessary to initiate a new bidding process.