The saga continues in the sale of the majority share of Kumho Tire Co.
According to South Korean media, leading bidder Qingdao Doublestar Tyre Co. is fighting back after growing pressure to prevent the tiremaker from purchasing the 42% majority share of Kumho. Many South Korean politicians believe the sale to Doublestar will result in lost jobs in the country, however the Chinese company vows there would be no layoffs after its planned acquisition.
“Doublestar has agreed with the creditors to accept and hold all present job positions of Kumho Tire employees,” the Chinese tiremaker said in a statement. “We also plan to recruit more talent from the region to promote valuation and sustainable growth of Kumho Tire.”
Doublestar also reaffirms it will keep Kumho Tire operations separate from its Chinese brand.
If the acquisition of Kumho is finalized, Doublestar would be one of the 10 largest tiremakers in the world.
“Doublestar’s acquisition of Kumho Tire is expected to generate a ‘win-win’ effect for not only the two companies’ employees, but also their shareholders, clients, and the global tire industry,” the company said. “Also, the development of Kumho Tire will benefit all employees, shareholders and the society in general.”
Kumho Tire was put under the control of creditors in 2009 due to a liquidity crisis. At that time, Park Sam-koo, chairman of Kumho Asiana Group, was given the rights of first refusal that allows him to by back the stake by paying more than the highest bidder.
Park has been working with a group of investors to beat Doublestar’s bid of $855.6 million. He has until April 12 to decide if he will practice his rights or drop out.
If the creditors don’t allow Park to buy back the majority shares via a consortium, Park has threatened to take legal action.
Korea Development Bank, one of the main creditors, is scheduled to make a decision by March 24 if Park will be allowed to use a consortium of investors to repurchase stock.
It is unlikely the future ownership of Kumho Tire will be resolved quickly.
