[Courtesy of Kumho Tire]
Creditors on Tuesday kickstarted the process of selling a controlling stake in Kumho Tire Co., the world's 12th largest tire maker with an international product base, that has drawn interest from potential domestic and foreign buyers.
Nine creditor banks acquired a combined 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 company with plants in China, Vietnam and the United States graduated from a workout program in late 2014.
From Tuesday, state-run Korea Development Bank and other creditors started getting letters of intent from investors to sell their stake worth 750 billion won (671 million US dollars) at current market prices with the main bidding slated for January next year.
Kumho Tire is South Korea's second-largest tire maker, and creditors hope to attract global players such as Bridgestone and Michelin into the bidding. However, media attention has been on Kumho Asiana Group chairman Park Sam-koo who has expressed his willingness to take back Kumho Tire.
Park has tried to rebuild the tattered empire and transfer group leadership to his eldest son, Park Se-chang.
The group chairman 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. Without exercising his right, he could participate in the bidding by forming a consortium with other investors.
In an apparent attempt to bolster his position, Asiana Airlines, a key group subsidiary, has officially pulled out of a project to build a site for aircraft maintenance, repair, and operations in the central city of Cheongju.
The price may go up to one trillion won but analysts predict the company's poor performance may have a negative impact on the price. Kumho Tire's second-quarter operating profit stood at 40.7 billion won, down 26.4 percent from a year ago. Its poor performance was blamed on decreasing sales of conventional tires.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
