Kumho Asiana Chairman Park Sam-koo’s prospect of buying back the group’s tire-making unit Kumho Tire
still faces uncertainty as many deal watchers question whether he will be able to pay a 100 billion won (US$88.21 million) down payment for the deal.
Chinese tire maker Qingdao Doublestar, which has been selected as the preferred bidder for acquiring a controlling stake in Kumho Tire, is in the final stage of talks before signing the stock purchase agreement with the creditors, according to media reports on Feb. 27.
The two parties are planning to sign the deal by end of this week, according to the creditors.
Doublestar’s purchase, however, can be preempted as Park has the right of first refusal in the sell-off that allows him to repurchase the stake under the same terms as Doublestar.
If Park wants to practice his rights, he is required to make a 100 billion won down payment upfront, 10 percent of the deal value estimated around 1 trillion won, sources say.
But deal watchers question whether the chief will be able to make the payment within a short time frame of one month. Park is said to be short on cash as he already spent 723 billion won last year to buy back another affiliate Kumho Industrial.
Earlier this month, the chief claimed he has raised 1 trillion won from financial investors and strategic investors to buy back the company. But without disclosing the exact source of the funds, industry watchers are questioning Park’s ability to outmatch Qingdao Doublestar.
By Ahn Sung-mi (firstname.lastname@example.org)