April 25, 2024

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[THE INVESTOR] Kumho Asiana Group Chairman Park Sam-koo did not participate in the preliminary bidding to acquire the group’s tire-making unit Kumho Tire on Nov. 9.

But the Kumho chief still seems to be firm on taking back the company from the hands of creditors as industry sources say he is likely to exercise his right of first refusal, which allows him to repurchase the stake under the same terms as the highest bidder. 

Kumho Asiana Group Chairman Park Sam-koo

A controlling 42.1 percent stake of 66.3 million shares in the tire maker owned by nine creditors since the company was put under a debt workout program in 2009 is currently put up for sale. The company graduated from the program in late 2014.

Based on the company’s current stock price, the creditors expect the sale could fetch as high as 1 trillion won (US$870.57 million), when management premiums are added.

Global companies such as Chinese state-owned chemical firm ChemChina, Japanese Yokohama Tire, Indian Apollo Tyre, German auto parts firm Continental, as well as overseas strategic investors, are rumored to have submitted their letter of intent to enter the buyout race. But none of them have confirmed their bidding.

Earlier, deal watchers had expected Park to enter the preliminary bid, by forming a consortium with private equity funds such as Affinity Equity Partners, to finance the purchase. Park, after paying 723 billion won earlier this year to buy back another affiliate Kumho Industrial, is said to be short on cash.

The final bidding process and the selection of a preferred bidder is expected to take place in January next year.

By Ahn Sung-mi (sahn@heraldcorp.com)