April 24, 2024

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[THE INVESTOR] Kumho Asiana Group, led by Chairman Park Sam-koo, will issue bonds to cover the 400 billion won (US$364.46 million) required to bring back Kumho Buslines into its fold, local media reported on Aug. 10.

According to reports citing unnamed investment bank sources, the group will issue 150 billion won worth of bonds secured against Daewoo Engineering and Construction shares held by Kumho Terminal. Kumho Terminal is wholly held by Kumho Corp., the holdings company of Kumho Asiana Group. 

Kumho Asiana Group headquarters in central Seoul

Of the 150 billion won in bonds, 70 billion won will be purchased by LIME Asset Management, and the remainder will be divided up among various investment companies.

Kumho Terminal had purchased Kumho Buslines in June 2015, but sold the company again after three months to Consus Asset Management, in order to raise capital for the acquisition of Kumho Industrial. At the time, Kumho Terminal was given a 27-month call option to buy back the company.

The decision to exercise the option with more than a year left until expiration is thought to be part of the group’s plans to raise capital to acquire Kumho Tire. Industry watchers say that merging Kumho Corp., Kumho Terminal and Kumho Buslines would create a company capable of raising 100 billion won on an annual basis, which could lay the ground for Kumho Asian Group’s acquisition of the tire maker.

By Choi He-suk (cheesuk@heraldcorp.com)