The chairman of Kumho Asiana Group will not exercise his right to buy back its affiliate Kumho Tire now under creditors' control, unless its creditors give a clear answer to him about forming a consortium for the acquisition, the business group said on April 12.
Earlier the creditors, led by the state-run Korea Development Bank (KDB), said they would review whether to allow the business group’s chairman Park Sam-koo to form a consortium to buy back the cash-strapped Korean tire maker after they receive a detailed financing plan from him.
In a bid to raise funds for the buyback, Park has requested that creditors allow him to form a consortium of strategic investors. The creditors, however, voted not to allow him a consortium, and has not answered so far about the business group’s requests to send the specific terms and conditions of their agreement with China-based Doublestar.
Under the circumstances, the business group claimed that it was clearly unfair and self-contradictory that the creditors permitted Doublestar to form a consortium composed of six companies while it does not for Kumho Asiana.
Though the creditors said that they would review the allowance of a consortium for Park based on a detailed financing plan, the business group, however, claimed that any strategic investor will not be willing to participate in a consortium without prior permission to form it.
"We sent the major creditor KDB a notice asking to give an answer to our requests by April 17, including on the formation of a consortium," the business group said, adding, “Chairman Park would not exercise his buyback rights ‘this time’ unless the bank gives an answer by the deadline.” If Park wants to buy back the tire manufacturer, he should show his takeover intention and submit the fund-raising plan for it by April 19.
Park said that he would take legal actions against the creditors if they disallows him to create the consortium. The legal measures would possibly include a court injunction against the proposed sale of Kumho Tire to DoubleStar. Last month, the creditors signed a deal to sell their combined 42.01 percent stake in Kumho Tire to Doublestar for 955 billion won (US$831 million).
The KDB-led creditors have said they will push ahead with the deal made with the consortium led by Doublestar, unless the chairman Park formally expresses his intentions to take over Kumho Tire.