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Kumho Tire Creditors Continue with Negotiations

The main creditor of Kumho Tire, Korea Development Bank (KDB), is again in negotiation with China’s Qingdao Doublestar, but additional variables in play may pose serious challenges to any new deals.

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According to media sources within South Korea, the main creditor of Kumho Tire, Korea Development Bank (KDB), is again in negotiation with China’s Qingdao Doublestar about transferring the management of the global tiremaker after “a capital increase through third-party allocation.” But because Kumho Tire supplies tires to aircraft and vehicles used by the military, there is a variable in play. Korea’s Ministry of Trade, Industry and Energy and the Defense Acquisition Program Administration will have to allow for a foreign company to become the largest shareholder, plus certain approvals in order to secure management of the tiremaker. The KDB unofficially asked the DAPA if it is possible to sell the management of Kumho Tire to a foreign firm and the DAPA internally started examination.

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According to the article that appeared in Business Korea, “The sales of defense division at Kumho Tire accounts for a mere 0.2 percent of the total sales but the DAPA will not be able to easily make a decision because of a strong public opposition to the sale of Kumho Tire to a Chinese firm.”

 

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