Kumho Tire’s labor union has remained resistant to China’s Qingdao Doublestar acquiring the company, according to multiple South Korean news outlets.
Union members have come forward declaring that a Korean company actually came forward with interest in buying the debt-ridden tiremaker, the Korean Joongang Daily reported.
But the Korea Development Bank, Kumho’s main creditor, said that it never received an offer or acquisition from a local company, The Korea Herald reported. A Kumho official apparently told the paper that the union is trying to make up a story to delay the Friday deadline that the bank set for a deal to be worked out between the union and Doublestar.
Since the acquisition was announced in earlier in March, union members have opposed Kumho’s takeover by Doublestar, saying it wants to acquire Korea’s advanced tire technologies, according to Joongang Daily. If the acquisition were to go through, the union has promised it would shut down the company, leading to the loss of many jobs. The union has demanded a takeover by a Korean company. A visit from Doublestar Chairman Chai Yongsen last Friday did little to smooth over negotiations with the union.
If creditors, Doublestar and the union do not agree to accept a reorganization plan that would make Doublestar the leading stakeholder, Kumho would go into a workout process, Tire Review reported. If a plan is accepted, the deal would end 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.