China’s Qingdao Doublestar Co. Ltd. has agreed to invest 646.3 billion won ($597.4 million USD) for a 45% stake in South Korea’s Kumho Tire Co. Inc, multiple news outlets reported at the beginning of March.
According to a statement filed with the Shenzhen stock exchange, China’s Qingdao Doublestar Co Ltd’s parent company will buy 129.3 million ordinary shares in Kumho Tire, becoming the controlling shareholder in the debt-ridden South Korean tire maker, Reuters reported.
The deal, which follows months of on-again, off-again negotiations, faces opposition from Korean labor unions, who have vowed to block the deal. Kumho’s debt, which totals 1.9 trillion won ($1.8 billion), was extended to the end of January to facilitate a bailout deal through a debt restricting process.
While Kumho Tire USA, Inc. has enjoyed increased stability and growth, the global organization has been back-and-forth in negotiations with creditor Korea Development Bank to save the company. Last April, a deal for Qingdao Doublestar to purchase Kumho fell through after Kumho’s creditors and Doublestar failed to reach an agreement on financial terms. New outlets report that Doublestar’s investment caps a lengthy takeover process involving both companies.
This story will be updated.
