It was a difficult birth. As regular visitors to this site are well aware, Qingdao Doublestar Co Ltd.’s acquisition of Kumho Tire was punctuated by more than its share of complications: Threats of mass resignations, bickering over brand name use and questions about financing all belonged to the experience.
Buried within the more than 134 pages of Qingdao Doublestar’s latest semi-annual report is the news that the state-owned tyre maker will extend China’s ‘one belt, one road’ strategy by working with a local partner to establish a tyre production facility in Algeria. The Chinese-language document states that its subsidiary Hong Kong Doublestar signed a joint venture agreement with El Hadj Larbi Pneumatiques during the reporting period.
Qingdao Doublestar Tire, owner of Kumho Tire since July 2018, has once again grown through an acquisition. The Chinese tyre maker says it has completed the purchase of Shandong Hengyu Technology Co., Ltd. for RMB 899 million (£103.1 million). Doublestar disclosed in March that it had signed an agreement with Hengyu Technology’s administrator to acquire 100 per cent equity in the business.
Qingdao Doublestar Group, recently named Antonio Smith Montero as general director for the company in Spain and Portugal. With this announcement the company, which recently acquired Korean manufacturer Kumho Tire and is well-known for its Doublestar, Crossleader and Aosen brands has underlined its commitment to the Iberian tyre market.
China’s largest tyre manufacturer, Zhongce Rubber, has entered the global top ten, research published today by Tyrepress shows. Best known in Europe for its Westlake brand, the company has pushed up in the rankings past Giti Tire – manufacturer of GT Radial – which did not supply 2017 figures before the deadline, Toyo Tires, and Cooper Tire & Rubber, which fell three places. Competition in the lower quarter of the top ten places is fierce, with turnovers for tyres between 2.4 billion euros (Cooper in 13th) and 3.2 billion euros (Maxxis in ninth).
After months of uncertainty, union members within the Kumho Tire workforce voted on 30 March to accept the sale of a 45 per cent stake in the tyre maker to China’s Doublestar Tyre. It is understood that just over 60 per cent of voting union members were in favour of the sale, sparing Kumho Tire from receivership. The deal with unionised employees was sweetened by guarantees of their job security for at least the coming three years.
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.
The latest news from South Korea suggests that local tyre distributor and retail network operator Tire Bank Co. Ltd. would like to purchase the Kumho Tire shareholding that China’s Qingdao Doublestar Tire is currently negotiating to acquire from creditors. The unexpected appearance of the Daejeon-based firm, which hinted it may bid together with one or more partners, further complicates an already drawn out and difficult transaction.
It won’t be a Good Friday for Kumho Tire if an agreement between its creditors and the labour union representing its workforce isn’t reached by the end of this week. Friday 30 March is the deadline set for a formal consensus regarding the sale of a 45 per cent share in the tyre maker to China’s Qingdao Doublestar Tire for KRW 646.3 billion (£421.7 million).
The Korea Development Bank (KDB) has denied finalising the sale of a 42.01 per cent share in Kumho Tire to Qingdao Doublestar Tire, but that’s exactly what we’d expect it to do until all the ‘i’s are dotted and ‘t’s crossed. Negotiations between Kumho Tire’s creditors and Doublestar recently recommenced, however The Korea Herald has quoted a KDB official as stating “nothing has been finalised.”
Creditors holding a 42.01 per cent share in Kumho Tire are going to look for a new owner – again. Some four months after Qingdao Doublestar Tire’s planned acquisition of the South Korean tyre maker collapsed, the Korea Development Bank (KDB) and the other creditors are said to be once more looking for an external investor.
As expected, Kim Jong-ho has returned as chief executive officer of Kumho Tire. The former company president and chief executive officer was named the tyre maker’s new chairman and chief executive officer at an extraordinary meeting of shareholders. It is understood that he will hold this position for a three-year term.