April 26, 2024

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[THE INVESTOR] SK Group, Korea’s third-largest conglomerate, on Dec. 15 denied a news report that it was in talks to acquire the debt-laden Kumho Tire with its creditor Korea Development Bank. 

"We are not considering acquiring Kumho Tire," SK said in a disclosure. 

A local business daily reported earlier in the day that SK was seeking to acquire some 30 percent stake in the troubled tire maker via capital increase worth 700 billion won (US$642 billion).

The report added SK also offered to buy KUmho Tire's plant in China, which is also facing financial difficulties.

The second-largest tire maker in the country faces 1.4 trillion won debt, including 100 billion won maturing at the end of this year.

Following the news, shares of Kumho Tire soared 30 percent to 5,200 won on Dec. 15.

Nine creditors led by state-run KDB are likely to discuss SK’s offer next week, the report said.

In March, Qingdao Doublestar signed a contract worth 955 billion won with creditors to buy Kumho Tire, but the deal fell through in September when the Chinese company demanded a cut in the purchase price to 800 billion won, citing deteriorating earnings.

In the January-September period, Kumho Tire’s net loss deepened to 59.91 billion won from 54.93 billion won a year earlier.

By Park Ga-young (gypark@heraldcorp.com)