The head of Chinese tiremaker Qingdao Doublestar, which recently acquired Kumho Tire Co., paid a visit to the South Korean company, calling the investment a “win-win” partnership and pushing for a deal with Kumho’s worker’s union, multiple news outlets report.
Doublestar Chairman Chai Yongsen met with Kumho creditors, the Korea Development Bank (KDB), discuss unresolved issues with the deal and explain Doublestar’s future investment plans to the labor union, according to The Korea Herald.
Under the deal, Kumho will operate as an independent business entity in South Korea as Doublestar has no intention of intervening in making major decisions for the company, news site Yonhap reported. Kumho is slated to focus on mid- and high-end tires for passenger vehicles, and Doublestar will focus on mid- and low-end tires for trucks and buses, Yongsen said.
KDB and creditors have given the union until Friday to accept their reorganization plan that includes a wage cut, streamlining and recapitalization scheme that would make Doublestar the leading stakeholder, ending the moratorium on Kumho’s debt obligation of 1.3 trillion won ($1.2 billion) which would send the company to bankruptcy court, British news site Pulse reported. If the labor union does not agree before Friday, Kumho would go into a workout process.
Earlier this month, Doublestar agreed to invest 646.3 billion won ($597.4 million USD) for a 45% stake in Kumho, Tire Review reported. A couple weeks later, Kumho’s workers union went on strike, demanding that creditors negotiate on the Doublestar takeover and the payment of overdue wages.
By acquiring Kumho Tire, Doublestar aims to seek co-prosperity and to become a global top-10 tiremaker through close cooperation, The Korea Herald reported.
