After months of fighting creditors to regain control of Kumho Tire, Kumho Asiana Group Chairman Park Sam-Koo announced today that he will not exercise his right of first refusal to repurchase Kumho Tire, the Korea Herald reports. With this decision, Chinese tiremaker and preferred bidder Qingdao Doublestar will purchase the 42% controlling stake in the company. But, don’t count Park out just yet.
Doublestar and Kumho Tire creditors have six months to complete the 955 billion won ($831 million) deal. However, if Doublestar does not purchase the controlling stake within six months, the company will lose its preferred bidder status, giving Park a new pre-emptive right to buy Kumho Tire shares.
According to the Korea Herald, Kumho Asiana called the Korea Development Bank’s selling process “unjust and unfair,” adding that the company would “no longer participate in the sale.”
Additionally, Kumho Asiana is still urging creditors for a fair rebid and to allow Park to form a consortium for the buyback. The group has also said it will not take legal action against creditors at this time, which it initially threatened.
Some industry analysts believe Doublestar will face too many obstacles to buy the tiremaker in six months – including issues with Kumho Tire trademark rights, which are held by Kumho Industrial.
Additionally, Doublestar’s finances and ability to afford Kumho Tire have come into question, with the Chinese tiremaker reportedly taking out a large loan and setting up a consortium to acquire Kumho Tire.
