Consortium Not Allowed
Creditors of Kumho Tires are likely to start the process of selling the ailing tire manufacturer to a China-based company as the state-run Korea Development Bank (KDB) decided not to accept the requeat by the chief of Kumho Asiana Group to allow him to form a consortium
The starting date will be around April 20, but the management right of Korea’s second largest tire maker would be probably handed over to the court since the Kumho Asiana Group is preparing a legal action.
Kumho Asiana group chairman Park Sam-koo has urged the KDB, the main creditor of Kumho Tire, to allow him to form a consortium for the takeover before exercising his right to buy back its former tire-making affiliate currently under creditors' control.
Earlier, Park asked the KDB to reply to his inquiry over whether to allow the formation of a consortium by no later than April 17. The KDB has sent a reply to the request of Park, according to the financial industry in April 12. An official from the KDB said, “The KDB gave an answer to Park based on the resolution made by major creditors of Kumho Tire.”
Believing that Park must face difficulties getting the necessary funding for the acquisition, the KDB said Park needs to show his intention with a financial plan by April 19, if he wants to take back the former affiliate. The KDB-led creditors also said they would review whether to allow Park to exercise his right to buy back the tiremaker after receiving a funding plan for the purchase.
The creditors have said they will move forward with the sale of Kumho Tire to Chinese tiremaker Doublestar, unless the Kumho Asiana chairman formally expresses his takeover intentions by the deadline. The creditors had signed a deal earlier this month to sell their combined 42.01 percent stake in the tiremaker to China-based Doublestar for 955 billion won (US$830 million).