April 19, 2024

• 

[THE INVESTOR] Chinese tire maker Qingdao Doublestar, which has been selected as the preferred bidder for acquiring a controlling stake in Kumho Tire, have started discussing terms and conditions with creditors to enter into a stock purchase agreement, according to Korean media outlet The Bell on Jan. 25.

The creditors of Korea’s second-largest tire maker and Doublestar are planning to work out the price requirements and time table for the deal, as well as evaluate operational plans. After the negotiations, the two parties are planning to sign the stock purchase agreement by end of next month. 

The purchase however can be preempted. Kumho Asiana Chairman Park Sam-koo has the right of first refusal in the sell-off that allows him to repurchase the stake under the same terms as Doublestar.

The creditors will notify Park of the deal details, and he has a month to decide on buying back the firm after coming up with financing plans.

Doublestar bid about 1 trillion won (US$857.40 million) to take over a controlling 42.1 percent stake in Kumho Tire, according to sources at the Korea Development Bank, its main creditor,

The Kumho chief has expressed firm intentions of buying back the company that was put under the control of creditors in 2009 due to a liquidity crisis, but deal watchers question his ability to finance the purchase.

Park, after paying 723 billion won last year to buy back another affiliate Kumho Industrial, is said to be tight on cash.

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