[Courtesy of Kumho Tire ]
Chinese tire maker Doublestar Tyre Co. has been selected as the preferential bidder for a controlling stake in Kumho Tire Co., the world's 12th largest tire maker with an international product base.
The decision made by creditors on Wednesday represents the first serious attempt by Chinese investors to acquire a major South Korean company since ties between Beijing and Seoul were soured by the proposed deployment of an advanced US missile defense shield.
Beijing argued the Terminal High Altitude Area Defense system would seriously hurt strategic interests of China and the security balance in Northeast Asia. There has been China's apparent trade retaliation, restrictions on K-pop stars, and the withdrawal of Chinese capital from South Korean markets.
Creditors acquired a 42.01 percent stake in Kumho Tire when its former parent Kumho Asiana Group put it under a debt workout program in December 2009 due to a severe liquidity crunch. The stake has been up for sale since Kumho, the country's second-biggest tire maker with plants in China, Vietnam, and the United States, graduated from a workout program in late 2014.
Initially, three Chinese firms including Shanghai Aerospace Industry Co. and Jiangsu GPRO Group Co. had offered to buy Kumho, but Doublestar received the highest score from creditors. Doublestar has reportedly offered around one trillion won (847 million US dollars).
After a share purchase agreement next month, the creditors will ask Kumho Asiana Group Chairman Park Sam-koo about whether he would buy back the local tire maker. He hopes to take back Kumho Tire founded by his father as part of efforts to rebuild his tattered empire.
Park has the preemptive right to buy back Kumho Tire as an individual, but there have been doubts among market watchers about his ability to finance the deal. In an apparent attempt to bolster his position, Asiana Airlines, a key group subsidiary, pulled out of a project to build a site for aircraft maintenance, repair, and operations in the central city of Cheongju.
reporter
Park Sae-jin
swatchsjp@ajunews.com
