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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Top bid for Kumho Tire below W1tr

  • PUBLISHED :December 09, 2016 - 15:29
  • UPDATED :December 09, 2016 - 15:53
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[THE INVESTOR] Shanghai Aerospace Industry Corp., a Chinese firm specializing in aerospace and automotive, has reportedly made the highest bid of 990 billion won (US$847 million) for controlling stake in Kumho Tire, Edaily reported on Dec. 9.

The SAIC outbid China’s Qingdao Doublestar, Jiangsu GPRO Group and Linglong Group and Indian tire maker Apollo Tyre.

But the price falls short of creditors’ expectations of 1 trillion won plus from the sale. 




“Kumho Tire’s disappointing business performance and its conflict with the labor union are possibly driving the price down,” an industry source was quoted as saying by the newspaper.

The Chinese government recently warned the four Chinese bidders to refrain from jacking up their bidding prices, saying it would only benefit the South Korean firm.

Kumho Asiana Group Chairman Park Sam-koo may be happy with the lower-than-expected price as he is seeking to repurchase the tire-making unit back since the firm was put under control of creditors in 2010 due to a liquidity crisis.

The Kumho chief is widely expected to exercise his right of first refusal that allows him to purchase the stake under the same terms as the highest bidder.

The five bidders have begun conducting due diligence and will visit three plants in Korea and overseas facilities in China and the US.

The results of the first round of bidding are expected to be revealed in January next year.

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

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