KDB dismissive of new offers on Kumho Tire
The clock is ticking, the labour union representing Kumho Tire’s workers still opposes the planned Qingdao Doublestar Tire acquisition, and creditor the Korea Development Bank (KDB) doesn’t think much of the alternative bid proposals announced this week. Time to find an alternative to liquidation is running out.
In its latest reportage on the drawn-out process to find Kumho Tire a new owner, The Korea Herald writes that KDB chairman Lee Dong-gull has dismissed the proposal announced by Tire Bank as “unrealistic,” and it has ignored that made by Hong Kong-based investment company S2C Capital Group Limited. S2C Capital told the KDB it can invest US$600 million in Kumho Tire, writing in a statement that “we will lend the money at an annual interest rate of three per cent for the next three or five years for securities in Kumho Tire stocks.” The KDB didn’t respond to this proposal as it was submitted without an official signature or specific addressee.
Union-related complications include its refusal to allow union members to vote on the proposed Doublestar Tire acquisition. The union also suggests that other South Korean companies are or were interested in acquiring the offered 45 per cent share in Kumho Tire, however it hasn’t disclosed the names of these companies.
The KDB will not sell the Kumho Tire share to Doublestar Tire without the labour union’s consent, and the deadline for this to be granted is tomorrow. If the deadline passes without an agreement having been made, Kumho Tire will go into liquidation.