China's Doublestar disclosed a new deal with creditors Tuesday to maintain all job positions at Kumho Tire to fend off an attempt by its former owner to throw a damper on the acquisition of South Korea's second-largest tire maker.
Doublestar signed a share purchase agreement this month with creditors of Kumho Tire to secure a controlling 42.01 percent stake for 955 billion won (857 million US dollars). It was this year's first major Chinese investment in South Korea which has been locked in a diplomatic row over the deployment of a US missile shield.
Kumho Asiana Group called foul play and threatened to take legal action against creditors for denying its right to buy back the former affiliate. The group also appealed to patriotism saying Kumho Tire should not be turned over to a foreign company especially from China.
Doublestar hit back, disclosing its plan to hold all job positions. "Doublestar also expressed its commitment (to) recruiting additional talents from the region in order to facilitate mutual growth with the local community," the Chinese company said in a statement.
"Since being selected as the preferred bidder in January, propelled by the firm’s advantage in non-price factors, Doublestar has been consistently addressing its plan to create strategic partnership and synergy with Kumho Tire in terms of enhancing Kumho Tire's brand value," it said.
Kumho Tire with plants in China, Vietnam, and the United States was put under a debt workout program in December 2009 due to a severe liquidity crunch. It graduated from the program in late 2014.
Kumho Group Chairman Park Sam-koo 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. Creditors have rejected Park's proposal to set up a consortium to buy back Kumho Tire.
Lim Chang-won = firstname.lastname@example.org