Kumho Tire is no longer part of the Kumho Asiana Group. After submitting an application with the Korea Fair Trade Commission in November, on 29 December the tyre maker officially separated from the group as part of a restructuring programme organised by its creditors.
While Park Sam-koo won’t bid to acquire the Kumho Tire shareholding currently held by its creditors, he already holds one particular asset, and he’s not willing to simply let go of it. Through subsidiary Kumho Industrial, the Kumho Asiana Group chairman controls rights to the Kumho brand name. Park is prepared to allow whoever acquires the 42.01 per cent share in Kumho Tire to use the Kumho name – provided they pay for the privilege. This is a point that will likely complicate any potential sale.
On Friday, we reported that Chinese tyre maker Qingdao Doublestar Tire was angling for a ten per cent discount on the 42.01 per cent stake in Kumho Tire it wishes to acquire. Not so, wrote The Korea Times over the weekend – according to its sources, Doublestar wants creditors to cut the price to KRW 800 billion (£544.6 million), a discount of 16.2 per cent on the original bid price.
Just when it seemed the sale of a controlling stake in Kumho Tire to Qingdao Doublestar Tire was in the bag, the Chinese tyre maker has surprised everyone with its demand that Kumho Tire’s creditors reduce their KRW 955 billion (£650.3 million) bid price by ten per cent. Will this cause the deal to fall apart?
Although it’s probably too early for champagne corks to pop, progress has been made in the Kumho Tire shareholding negotiations. Yonhap News Agency writes that the tyre maker’s creditors have “tentatively agreed to accept original proposals” made by Kumho Asiana, adding that this may pave the way for creditors to complete the sale of the 42.01 per cent shareholding to Qingdao Doublestar Tire.
Park Sam-koo won’t exercise his right of first refusal to acquire a stake in Kumho Tire. The Kumho Asiana Group chairman has described the Korea Development Bank’s decision to prevent him from funding the acquisition through formation of a consortium as “unfair,” and as a result Kumho Asiana has opted against participating in the sale of the 42.01 per cent shareholding.
Park Sam-koo reportedly possesses the funds needed to buy back a controlling stake in Kumho Tire. The chairman of the Kumho Asiana Group has raised almost KRW 1 trillion (£695 million) to acquire the 42.1 per cent share in Kumho Tire currently held by the Korea Development Bank and other creditors. The funds have been borrowed from financial investors and associates.
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 Kumho Asiana Group has appointed Kumho Tire vice-present Park Se-chang the group’s chief executive officer. According to a Kumho press release, 40-year old Park, the only son of group chairman Park Sam-koo, will lead Kumho Asiana’s strategic management unit with current CEO Seo Jae-hwan.
The chairman of Kumho Tire’s parent company has been accused of manipulating the price of Kumho Industrial shares ahead of a planned majority shareholding sale. Drawing its information from “the industry”, Business Korea reports that a certain Mr. Kang has sued Kumho Asiana chairman Park Sam Koo and 20 other Kumho executives for professional malpractice, violation of the financial investment laws (including insider trading) market price manipulation and unfair trading, and bid interference.
Two Kumho co-CEOs resigned just a few days after being appointed, according to the Korea Herald.
Lee Han-seon and Park Se-chang, son of Kumho Asiana Group chairman Park Sam-koo, resigned from the position of CEO after the company’s major creditors demanded the pair’s resignations. The banks cited procedural problems with appointments as reason for the resignation, the Korea Herald reported.