Chinese tire maker Qingdao Doublestar has officially scrapped its deal to take over majority stake in Kumho Tire, according to media reports on Sept. 12.
The 955 billion won (US$845.92 million) deal collapsed when Doublestar signed the official request sent by the creditors on Sept. 8, asking the Chinese tire maker to nullify the stock purchase agreement.
State-run Korea Development Bank, Kumho Tire’s main creditor, said it will review the request and discuss with other creditors to come up with future plans for the tire maker.
The creditors decided to call off the deal last week, citing Doublestar’s unreasonable demand for a discount in purchase price. Citing the tire maker’s slumping earnings since it became a preferred bidder, Doublestar had requested the creditors to slash the price by 16 percent to 800 billion won.
In March, Doublestar won the bid to acquire a controlling 42.01 percent stake in Korea’s No.2 tire maker that has been financially struggling.
The creditors had also requested Kumho Asiana, the tire maker’s parent group, to submit a self-rescue plan to revive the ailing tire unit, which saw a 50.7 billion won operating loss in the first half of this year. The creditors will review the proposal and will make a decision by next week. If the submitted plan is not accepted, the creditors could remove Kumho Asiana Chairman Park Sam-koo and other top brass from the tire unit, or file for court receivership.
By Ahn Sung-mi (email@example.com