April 20, 2024

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[THE INVESTOR] Kumho Tire may be headed straight for court receivership at this rate, as it has so far failed to reach a consensus on whether to accept investment from Qingdao Doublestar as of March 29, a day before the deadline for submitting an answer.

The union wants nothing to do with Doublestar, but the creditors -- led by state-run Korea Development Bank that holds a 13.5 percent stake in the tire company -- are also not backing down.

If KDB goes ahead to apply for court receivership, Kumho Tire is most likely to be shut down and not given a second chance, according to the hawkish bank and industry watchers.

This means the creditors of Kumho Tire that include KDB, Woori Bank and Kookmin Bank may lose up to 1.3 trillion won.

Foreign investors’ money is also at stake. Industrial and Commercial Bank of China and UBS are also holding Kumho assets as collateral.

Once a termination is agreed upon, the creditors begin to sell these collateralized assets and retrieve their investments based on order of priority.

On March 28, Korean tire maker Tire Bank attempted to bid for Kumho, but both the company and creditors ruled out any deal.

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